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With the cost of energy rising, many people are struggling to pay their bills. What happens if you don’t pay your electric bills? (Image credit: Adobe)
With the cost of living crisis biting deep, many of us are struggling to pay for even basic necessities, and we’ve likely all wondered what happens if I don’t pay my electric bill.
If you’ve fallen behind with your electric bill, it can lead to feelings of anxiety and worry, especially if you’re generally on top of your household bills. Letters go unopened and emails unanswered – unfortunately, no matter how hard you try to ignore the problem, it won’t just disappear.
What steps can my electricity supplier take?
Not paying your electric bill can have severe consequences and may impact your life moving forward.
According to British Gas, there are several actions they can take under these circumstances. They will send you a letter or email informing you of their plans beforehand.
Your details may be passed to a debt collection agency.
Your electric provider may apply to the courts for a warrant to enter your home and install a Pay-As-You-Go (PAYG) meter. This will make it easier for them to reclaim the debt.
Some electricity meters can be switched to smart PAYG remotely, which is another option providers have at their disposal.
If any of these actions are taken, you will be charged a fee which varies accordingly:
£7 to pass your details to a debt collection agency
£28 to cover the admin fees for handing over your debt to a collection agency
£13 which covers the extra costs for debt recovery
£56 to apply to the courts for a warrant to enter your property
£39 to come out to your home
£94 to carry out the warrant and fit a PAYG meter
Can my electricity supplier disconnect me?
Having your electric supply disconnected could damage your or your family’s welfare, especially during the winter months. Suppliers, therefore, are reluctant to do this and will generally only consider it after all other options have failed.
Will my credit rating be affected if I don’t pay my electric bill?
Credit ratings guide prospective lenders and other companies on how you handle your money and if you are able and likely to pay your bills on time.
There are three leading credit reference agencies in the UK – Experian, Equifax and TransUnion. They all have different scoring systems, but generally, they will grade you on a scale of 0–999. This grade gets updated every month and can rise or fall depending on your financial activities that month. The higher your score, the easier you’ll find it to acquire credit; conversely, the lower the number, the harder it is to borrow money, get finance to buy a car and even have a new mobile phone on contract.
Paying bills late, or not at all, can have a highly detrimental effect on your credit score, which can be difficult to rectify. Not paying your electric bill can, therefore, negatively impact your credit rating.
What can I do if I can’t pay my electric bill?
If you’re struggling to pay your electric bills, it’s best to talk to your supplier so they can work out an affordable payment plan with you. (Image credit: Adobe)
To avoid extra charges being added to your bill, or your credit rating affected, it’s essential to talk to your electricity provider.
Your supplier has to help you reach a solution and negotiate a repayment plan that is affordable for you. Electric arrears are considered priority debts and should be paid before most other debts, such as credit cards or mobile phone bills.
Arrange a payment plan to cover what you owe and your current use with your supplier, who must consider what you can afford to pay back, given your income, outgoings and personal circumstances.
Your willingness to engage and come to an agreement should halt any other action by your electric provider, as long as the payments are maintained.
Where can I get help if I’m struggling with my bills?
If you can’t pay your electric bill or are struggling to afford any of your debts, it’s important to be honest and proactive, however difficult that might be.
There are lots of places to go for support and advice, as well as your energy provider.
The Office of Gas and Electricity Markets (Ofgem) have an extensive section on their website focusing on problems paying bills. They echo British Gas’ advice to contact your supplier in the first instance and arrange a payment plan.
Citizens Advice is the first port of call for many people who are struggling, and they offer advice and support across many areas, including bills, housing and government benefits.
Turn2us is a nationwide charity dealing with people experiencing financial hardship. Their benefit calculator can check if you are entitled to claim any benefits and how to apply. They can also advise on the many grants designed to help people who are finding it difficult to pay their bills.
The UK Government is giving millions of households a non-repayable energy discount this winter of £400, as part of their Energy Bills Support Scheme. Paid over a period of six months starting in October 2022, direct debit and payment card customers will see an automatic deduction off their energy bills. Those with prepayment meters will receive discount vouchers.
Your local council may also be able to help, and many run a Household Support Fund scheme that may offer financial assistance if you qualify. Contact your local council to find out if they are part of the scheme.
You don’t have to struggle in silence; there are people and organisations that will help.
Martin Lewis’ Money and Mental Health Policy Institute has a website packed with useful advice and helpful suggestions. Mind is also focused on helping people experiencing poor mental health. StepChange are another charity that links mental wellbeing and money worries, offering support and advice to those caught up with negative mental health.