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Time for energy suppliers to take action on fuel poverty

July 12, 2021

Fuel Bank Foundation has issued a rallying call to energy companies in the UK to do more to support the four million people struggling to pay for gas and electricity during the winter.

The charity has warned that more families across the country face a fuel crisis unless more is done to make it easier for customers to top up their prepayment meters and for better advice and guidance to be provided to those at risk of self-disconnection.

Fuel Bank Foundation has published a list of measures that it would like to see implemented by energy companies. The measures cover three main areas – ‘topping up’, ‘avoiding the crisis before it happens’ and ‘help and support’.

 

Among the key recommendations are:

  • Make sure customers can continue to top up prepayment meters on the high street or at a local shop or post office, as well as online.
  • Allow customers to top up their meter with any value through removing minimum top up thresholds
  • Guarantee that when outstanding charges are being collected by suppliers, a maximum of 50 per cent of a top up is used to clear missed payments, allowing at least half to be used for future energy consumption.
  • Review daily or weekly missed payment charges to ensure they remain affordable and provide flexible repayment plans.
  • Introduce a prepayment meter suitability assessment for new customers to ensure it is a practicable means of paying for energy. This should be reviewed on a regular basis.
  • Make it easier for prepayment customers to access help and advice when they need it, including providing 24/7 support and offering alternative means of accessing help, such as via text, WhatsApp or email.
Based on our experiences over the past 12 months, following consultations with partners and stakeholders, and through talking with the households we have supported we have devised a 12 point action plan that we would like to see implemented by energy suppliers to help provide greater protection for households at risk of self-disconnection.
Matthew Cole, Fuel Bank Foundation

“Suppliers are already making a difference and we see examples of where support is provided to customers, but there is much more that could and needs to be done to have a real meaningful impact.

“For example, removing the minimum amount for a single prepayment meter top-up would alleviate a lot of stress and anxiety for some customers. In some of our Fuel Bank Centres, a quarter of clients make a £1 top up three times a day.

“However, this isn’t possible with suppliers that apply a higher minimum amount. The policy is inconsistent and confusing, and we would like to see a national industry standard introduced.”

Mr Cole said consistency was also needed between suppliers with regards to the policy for the collection of missed daily or weekly charges.

Emergency funds that are supposed to be used to pay for gas and electricity can sometimes be taken in full to repay a missed charge, leaving the customer without energy for heating, lighting and cooking. We’re calling for all suppliers to adopt a policy whereby a maximum of 50 per cent can be used to repay missed payment charges.
Matthew Cole, Fuel Bank Foundation

According to the latest figures from the Department for Business, Energy and Industrial Strategy, there are more than three million households living in fuel poverty in England, as well as 613,000 in Scotland, 155,000 in Wales and 128,000 in Northern Ireland.

Earlier this year, Fuel Bank Foundation published a report, based on a survey of people it has helped, that found 89 per cent were struggling to top up their gas and/or electricity meters, with 81 per cent struggling to pay household bills, particularly food and water.

For many vulnerable customers, the COVID-19 pandemic has made the situation worse. On average across its Fuel Bank Centres, Fuel Bank Foundation has seen a 23 per cent increase in the number of people seeking help, with some centres seeing an increase in demand of more than 300 per cent.

“The pandemic proved to be the tipping point for some households and we may not be fully out of the woods yet, with the end of the furlough scheme in September potentially leading to an increase in unemployment. Coupled with the start of autumn and the colder weather, some people may find the extra pressure on household budgets too much to bear.

“Energy companies need to act now to put measures in place so they are prepared should the worst happen.”

Since it was launched in 2015, Fuel Bank has helped 400,000 people and provided more than £6million of funding through its voucher scheme to support vulnerable families and individuals unable to pay for fuel. The scheme works by providing a fuel voucher to top up prepayment meters.

Today, Fuel Bank Foundation operates more than 140 Fuel Bank centres across the country, working in partnership with advice agencies and food bank charities, including The Trussell Trust and Feeding Britain.

To read Fuel Bank Foundation’s 12 Point Action Plan, click here.