Struggling energy bill payers get licence to switch

switch energy bills prepayment meter

switch energy bills prepayment meterCustomers of the big six energy suppliers on prepayment meters with debts of up to £500 will soon be able to switch deals and get cheaper energy bills.

The move - due to take effect from November 1 - comes as a host of new measures are announced in a bid to help struggling households cope with utility prices which have jumped sharply in recent years.

Currently, only prepayment customers of British Gas, EDF, Eon, SSE, Scottish Power and npower with debts of £200 or less are allowed to switch.

Financial pressures

According to energy regulator Ofgem, there are some 320,000 gas and 315,000 electricity customers with prepayment meters who owe money to their supplier as household budgets remain squeezed.

In most cases they racked up the debts when they were allowed credit and slapped with prepayment meters as part of a repayment plan.

It is thought the move will help tens of thousands of households across the country, encouraging suppliers to work more effectively with homes to resolve debt issues and use disconnection as a last resort.

Figures due to be released by Ofgem next week will show a 59% fall in the number of people disconnected from their gas supply and a 54% drop in electricity disconnections, partly as a result of people being given more time to repay debts.

However, the average amount of debt people are repaying on their gas accounts rose to £371 in 2011, up from £339 the previous year. Meanwhile, the average electricity debt fell slightly to £357.

Sarah Harrison, senior partner for sustainable development at Ofgem, said: "We welcome the significant falls in the number of households being disconnected, but Ofgem remains determined to ensure suppliers continue to focus on helping consumers manage their energy bills and reduce their debt.

"That's why we are pleased to announce a commitment from major suppliers which will permit tens of thousands more prepayment meter consumers in debt to choose the cheapest energy deal."

Switching supplier

While changing to a new deal with your current provider can save you money, going one step further and switching to another energy supplier can save you hundreds of pounds each year, so it is definitely worth looking into.

Switching tariffs may sound like a lot of work, but in reality it is actually very straight forward!

It is important to time your switch to avoid any early exit penalties, and also be wary of bundled deals which are not always as good as they first sound.