In Debt: Changes to Energy Debt

New measures released by industry regulator, Ofgem, means that customers on a pre-paid meter who owe their energy supplier as much as ?500 can switch energy supplier.

At the moment, if you owe your energy supplier ?200 or less then you can move to a new company, however with the amount of arrears typically exceeding this level, Ofgem has amended the rules.

Gas and Electricity Debt

A high percentage of people supported at Debt Support Trust owe money to their gas and electricity supplier and it means often people are living in fuel poverty.

At Debt Support Trust, we believe that the most impoverished people in society were tied to an energy supplier and being charged higher rates for fuel because of their arrears. The person in debt had no choice but to accept this because of the arrears. This made cutting the ties between energy supplier and client very difficult.

The news means people with debt over ?200 to the energy supplier but under ?500 can now switch energy supplier to a cheaper deal. The indebted individual isn't getting away without paying the money, but they will be in a better position to repay the debt because of the money they are able to save on their fuel bills.

Number of people on Pre-Paid Meters

Ofgem has said there are 320,000 gas and 315,000 electricity customers who are on pre-paid meters because their owe money to their energy supplier.

A pre-paid meter is installed when the energy supplied is owed money. This was used for the energy provider to reclaim the money they were owed. The price of the fuel is higher than normal so the energy company can recoup the money they are due.

However, this solutions doesn't encourage people to get back out of debt and instead often people are left in fuel poverty because they are part of the 'can't pay society'.

Source: http://www.debtsupporttrust.org.uk/blog/2012/9/24/in-debt-changes-to-energy-debt

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