From 1 December 2022, electricity and gas suppliers will reduce the maximum amount deducted from a prepayment meter top-up to repay debt from 40 per cent to 20 per cent, and will carry out a bespoke assessment of the customer's ability to pay1. The change forms part of a Consumer Energy Charter developed by the Consumer Council with the Utility Regulator, the Department for Communities, the Department for the Economy and the gas and electricity suppliers1. Suppliers signed up to the charter voluntarily1.
Under the existing Code of Practice overseen by the Utility Regulator, a supplier could previously deduct up to 40 per cent from a purchase of electricity or gas to reduce debt. The Consumer Council states that halving that figure means at least 80 per cent of any new payment will go to securing additional supplies of gas or electricity1.
"From 1 December 2022, electricity and gas suppliers will support those in debt by reducing the debt repayment amount from a maximum of 40% down to 20%."
The charter also covers other areas. Suppliers will not compel customers in debt to move onto a prepayment meter between 16 December 2022 and 20 January 2023 unless the customer specifically requests it, and customers on a supplier's customer care register will not be moved onto a prepayment meter unless they ask1. Each supplier is required to maintain a customer care register holding details of consumers who merit special treatment on account of age, disability or chronic illness, though consumers must choose to join it1. For credit customers, suppliers will continue to assess ability to pay and, where issues are identified, look at reducing repayment rates or extending repayment timeframes1. Debt collection processes, including those carried out by agents, must follow the Utility Regulator's Code of Practice for Payment of Bills, and a supplier remains liable for a breach regardless of who collects the debt1.
| Charter commitment | Detail |
|---|---|
| Prepayment debt deduction | Maximum cut from 40% to 20% from 1 December 2022 |
| Ability to pay | Bespoke assessment for customers in debt |
| Prepayment meter moves | Not compelled over 16 December 2022 to 20 January 2023 |
| Customer care register | No move to prepayment meter unless requested |
| Hardship fund | Financial contribution, amount at each supplier's discretion |
Suppliers have also committed to contributing to a hardship fund for customers struggling to pay bills. The amounts are at each supplier's discretion, and contributions may go to a fund, another charity of the supplier's choosing, or an in-house fund managed by the company1. The Consumer Council says who is eligible and how to access support is being handled by the funds themselves1.
Why it matters for households
For a household on a prepayment meter with arrears, the deduction rate determines how much of each top-up reaches the meter as energy rather than debt. At a 40 per cent deduction, £10 of credit bought £6 of gas or electricity; at 20 per cent, £8 does1. The charter's protections extend to all households, but the Consumer Council expects customers in debt, or vulnerable because of age, disability or chronic illness, to be more likely to use them1. The commitments are voluntary rather than licence conditions. The Consumer Council states that making them mandatory would have required changes to supplier licences, which can only take place after lengthy consultation, and that the Utility Regulator will monitor suppliers' behaviour to ensure they honour the commitments1. The charter does not remove debt; it changes the rate at which it is recovered and the assessment behind it. Households wanting detail on how deductions work can read repaying energy debt through a prepayment meter, and on arrangements more generally energy debt and repayment plans. The wider context of prepayment and pay as you go tariffs and of switching supplier with a prepayment meter and debt is covered separately.
What happens next
Advice NI states that all signatories will use best endeavours to implement the commitments as soon as they can and adhere to them to 31 March 20232. The Consumer Council says it will continue to monitor the situation and, should the need for these protections continue, will discuss further options with suppliers1. It has not been reported what, if anything, replaces the charter after that date.
Sources2 cited
- Customer energy charter | Consumer Council, consumercouncil.org.uk
- Consumer Energy Charter | Advice NI, adviceni.net