How best to handle energy debt?

Sea_Shell

For those who genuinely cannot afford to increase their DD, what is the best course of action.

I read on the BBC about a chap who'd taken out a £5000 loan over 5 years to pay his bills!!   What about next year?   Seems a bit of a knee jerk reaction.

AIUI, debt to your energy supplier doesn't attract interest charges, whereby to pay the bill may put you (further) into overdraft ?

As a last resort, is it better to pay what you can, let a debit balance build up, even in the short term, rather than get into debt trying to pay it?


I'm asking, as I may need to give this advice to family.

Thanks.

Sea_Shell

Anyone?

I thought this would be something many people are wrestling with, and wondered what the consensus was.

sourcrates

Just pay whatever your usage is, these utility companies always want you to increase your DD to cover the winter months as they put it, well I for one don`t like giving away money I won`t see the benefit of for 6 months.

I just pay for the amount I use, and refuse to allow them to increase my DD.

I will be continuing with that strategy going forward.

Sea_Shell

sourcrates said:

Just pay whatever your usage is, these utility companies always want you to increase your DD to cover the winter months as they put it, well I for one don`t like giving away money I won`t see the benefit of for 6 months.

I just pay for the amount I use, and refuse to allow them to increase my DD.

I will be continuing with that strategy going forward.

Thanks for replying, it's like tumbleweed round here!!!!

But what i'm asking is, what is the strategy for those who can't afford to pay for what they use?     Or do you mean pay what you can?

eg Up to now have paid by fixed DD.    That DD might need to go up by over £200 pm.   If someone can't afford a new fixed DD, averaged out over the year, who is able to then find the "winter" usage payments for their usage? 

fatbelly

Yes, pay what you can. If arrears build up, so be it. 

Check if your supplier has charitable funds to draw on but clearly they are going to be stretched.

https://www.moneysavingexpert.com/utilities/how-to-get-help-if-you-re-struggling-with-your-energy-bills-/

madaboutspots

I wonder f the reason it’s like tumbleweed is that everyone is scratching their heads wondering what the hell to do?

i don’t think, other than each household doing what they can and reaching out where they need help (in the hope they get some) there are any bigger or better answers. 

I don’t have the answers either. I cannot for the life of me understand how people are supposed to cope. The stress this must cause will be unbearable for some. There will surely be increased deaths as people in vulnerable positions with finances and/health will be too fearful to heat any part of their homes. 

Even for those who scrape by somehow and don’t freeze in the winter or literally have to choose between a meal or warmth, the months ahead will be arduous and the whole issue is proving to be miserable for millions. 

We are by comparison to so many, a rich country and should absolutely not be putting the population in this position. For what it’s worth I believe greed is becoming more invasive and widespread by those clambering or at/near the top. The government don’t seem bothered by anything else either. Greed seems to be endemic. 

So don’t feel abandoned or bereft of companionship on the thread. We’re all here with you. We’re just all sitting here in stunned silence wondering how the **** we cope and how the country has got to this point. We just don’t have the answers. 

Keep fighting - every day. 

SusieT

I am (according to my calculations) just about ok. Last winter I swapped all the bulbs to LED (even the low energy ones) so the actual light feels bright, but I am using a fraction of the electricity. Only have either the tv or a reading light on and not both, lights turned off as long as possible. I am changing my cooking so that I use the slow cooker, air fryer and microwave as much as possible, oven ir rarely used any more. I would like to switch the hob to a more energy efficient one but that will be expensive in itself  
Hopefully with reducing everything possible that needs electricity I will get through, if that does not work it is going to be a hard winter

sourcrates

I know its warm just now, but in a few short months it will be winter, hopefully not a cold one, but you never can tell in this country.

Best advice would be to just stay warm, and not worry too much about the cost, debts can be dealt with, there are numerous ways to do this, utility companies have their own schemes to hand, Government are trying, but I feel they will need to try harder before long.

Its easy to say I know, and I really don`t want to over simplify things, but even worst case scenario, you have a big bill you can`t pay, you get a CCJ, ordered to pay £4 a week, or whatever is affordable, that would be the reality of it, the consequences of non payment are miniscule compared to the alternative, and whilst it may not be fair to the debtor, it can be lived with.

Alarming as it is, this will affect everyone, and under such circumstances, leeway will be given.

sammyjammy

I have colleague at work that I help with his DIY DMP, we've just redone his SOA and it comes out that he has no money to repay his debt as of this month, one creditor has already responded and put his account on hold for 90 days, I am sure the others will follow suit but am curious as to what people will think the longer term consequences are as many will soon be in the same situation.  An increases in CCJs isn't going to get them money that isn't there!

2003bluecat

sammyjammy said:

I have colleague at work that I help with his DIY DMP, we've just redone his SOA and it comes out that he has no money to repay his debt as of this month, one creditor has already responded and put his account on hold for 90 days, I am sure the others will follow suit but am curious as to what people will think the longer term consequences are as many will soon be in the same situation.  An increases in CCJs isn't going to get them money that isn't there!

You would think they will have to take a pragmatic view as like you say there is no benefit to obtaining CCJs against those that  can barely afford their living costs.

I would imagine most creditors will not do a great deal until we are on our way out of the woods. I would hope not at least - especially if regular communication from debtors is made. Otherwise there will be an awful lot of pointless CCJs backing up the courts.

I wonder if the government may step in (similar to the pandemic) and force their hands a little, but I wouldn't bank on it.

It's going to be a very tough and scary time for many - but I agree with @sourcrates in that debt is better than the alternative.

macman

And people should rest assured that debt will not result in disconnection on residential accounts. The worst that can happen is that people will end up with a PPM.
Other European countries are less enlightened: didn't EDF used to disconnect in France when a bill was not paid within 30 days?
And, as I said on another post, it's not feasible that the gov't will allow any of the remaining suppliers to fail. The ones that are left are simply too large to be transferred by the SoLR process, so they'll just be placed into admin and effectively nationalised until they can return to profitability.