MSE News: One in five households 'owe energy firms cash' 9 April 2013 at 10:46AM in Energy 25 replies 2.5K views

Former_MSE_Helen

"The number of families in debt to their energy supplier is rising, says uSwitch..."

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One in five households 'owe energy firms cash'



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Wywth

Another press release by Ann Robinson

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “The soaring number of households in debt to energy suppliers is a clear indication of the pressure people are coming under just to meet the cost of their basic bills. The fact that a million more households have fallen behind in the last year so that over five million are now in debt to suppliers tells us everything we need to know about the impact of sky-high energy prices.
“The important thing for households is to try to keep a lid on energy costs. There are two simple ways to do this - use less energy by making our homes more energy efficient, perhaps by taking advantage of the Green Deal, and paying less for the energy we do use by switching to the most competitive tariff for our needs.

... perhaps by using a site such as uSwitch? :cool:

... and MSE Martin claims this site is free of adverts, when perhaps what he means is it is full of free adverts ...


As we approach the end of perhaps one of the coldest, most prolonged winters in recent times, it is no wonder many are in debt to energy providers at this time, especially if they pay monthly by DD.

However, if they switch supplier, they will need to repay this debt immediately (unless they can negotiate a repayment plan)

1. When asked ‘Thinking about your most recent energy bill from your supplier, which of the following best applies to you?’ 20% of respondents answered that they were in debt. 20% of 26 million is 5,200,000 households, or over 5 million. The mean amount of those in debit was £122.51. In 2012 the mean debt was £131.33.

So actually, on average, less is owed this year per customer than last year, based on the small sample of data.
So not really a story at all, just a free advert for uSwitch who are probably struggling at present with none of the energy providers changing prices, so few users looking to switch.

However:

3. When asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how does this compare with a year ago?’, 41% of respondents answered ‘My debt/arrears is higher’ and 9% responded ‘my debt/arrears is lower’

Proof, if proof were needed, you can make statistics show whatever you want ... or just create a reason to advertise uSwitch if necessary

Finally:

5. When asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how are you going to pay it off?’ 45% answered ‘By increasing my monthly direct debit’, 22% answered ‘I’m hoping it will go down naturally over time’, 22% answered ‘By lump sum’, 8% answered ‘By agreeing a repayment plan with my energy supplier’, 2% answered ‘By going on a prepayment meter’ and 2% answered ‘Don’t know’.

MillicentBystander

For once (probably! ) i agree with every single word you have posted, Wywth. Encouraging people to switch at this time of year (and especially with the weather we've been getting lately) is not the best idea given they will have to repay what is probably a large debit amount almost immediately before being allowed to switch. Some may even still be in exit penalty period as well. One of the (many) sad consequences of the privatising of the energy industry - the rise of commission-based switching sites.

mr_jrt

Though of course, any debt owed to the energy firms by your DD payments not meeting your usage is interest-free, so paying it off any sooner than you have to is foolish when that money could be working harder elsewhere.

argomatt

I'd rather be owing money to the utilities than them owing it to me,

It is not that long ago they used to insist on larger and larger direct debits, building up a huge credit balance and then being difficult when consumers asked for it back.

jamesd

Lets consider:

Not in debt to their supplier: the consumer has probably paid in advance due to monthly charging.

In debt to their supplier: It's spring. Around the time of bills covering the winter period that will be repaid by a normal direct debit over the summer. And these consumers have not been giving their supplier a free loan.

In debt to their suppliers is the best situation for a consumer to be in. It means they aren't giving their supplier a free loan.

A survey such as this would be more meaningful if conducted around October or November, when the summer fixed direct debit payments will have eliminated most debts that are just due to normal seasonal use variations. At the current time of year it's highly desirable for consumers on fixed direct debits to owe their supplier money.

Wywth

MillicentBystander wrote: »

For once (probably! ) i agree with every single word you have posted, Wywth. Encouraging people to switch at this time of year (and especially with the weather we've been getting lately) is not the best idea given they will have to repay what is probably a large debit amount almost immediately before being allowed to switch. Some may even still be in exit penalty period as well. One of the (many) sad consequences of the privatising of the energy industry - the rise of commission-based switching sites.

Any amount owed will normally be billed after the switch, not before.

A supplier cannot block a switch unless a large amount is actually owed, and it's not officially owed until at least 28 days after it has been formally demanded.

Most people who pay monthly will not normally receive any formal demand (before they switch) as all that will normally happen in the worst instance is that the monthly payment will be revised upwards

wakeupalarm

In reality it means 80% are in credit to their energy company. Perhaps the articles title should be Energy companies earning millions in interest holding onto customers money.

“The soaring number of households in credit to energy suppliers is a clear indication of the pressure people are coming under just to meet the cost of their basic bills. The fact that a million more households have fallen into credit in the last year so that over twenty million are now in credit to suppliers tells us everything we need to know about the impact of direct debit manipulation by the energy companies".

molerat

It's worse than that guys, look what the Daily Fail has to say http://www.dailymail.co.uk/news/article-2306066/Five-million-families-face-cut-falling-energy-bills.html?ito=feeds-newsxml

Five million families face being cut off after falling behind on energy bills

• Average families owes £123 to their energy supplier
• Report finds energy bills are £831 higher than in 2004

Not in the least bit alarmist

Wywth

molerat wrote: »

It's worse than that guys, look what the Daily Fail has to say http://www.dailymail.co.uk/news/article-2306066/Five-million-families-face-cut-falling-energy-bills.html?ito=feeds-newsxml

Five million families face being cut off after falling behind on energy bills
• Average families owes £123 to their energy supplier
• Report finds energy bills are £831 higher than in 2004

Not in the least bit alarmist

Love this at the end:

Michael Fallon, the Energy Minister, said he had ‘rarely seen a worse case of consumers being misled so badly.’
...
'All the major companies have signed up to a commitment to never disconnect a customer who is vulnerable.’

:rotfl:

chinagirl

I'm one of those families. We owe large amounts to EDF and its totally their fault.
We were paying a DD for gas and DD for electric. They wrote to me to say they would combine the bills and work out just 1 x DD to cover both gas and electric. This would be done automatically and I, the customer, need to nothing. The new combined DD did seem a little low, but I thought as the experts, they must be able to look at my gas consumption and work out a fair amount.
So, 9 months later, they come to read the meters and say I have been vastly underpaying for my combined Gas and Electric. Whose fault is that??? The upshot, is I now owe roughly £400 which would be roughly the gas usuage for the year.
To add insult to injury, I now have been forced to enter a Repayment Plan, making my combined DD for the gas and electric £186 per month

Where's the justice in that!!! I have been on the phone trying to make them see that this amount owing is purely down to them, because I had been paying exactly what they requested me to pay, so how come I am now responsible for their mistake. I argued, how can I be sure the new amount I have to pay is correct. How do I know that in 9 months time, they wont come to me again and say I owe them more money??
I have lost all faith in energy companies. Unfortunately, money is so tight, I have no option but to stick with them, as I cannot afford to pay a final bill if I did switch.:eek: