Hell hath no fury like an energy customer who is about to be forced to part with more than £3,000 a year just to keep the lights on – and one campaign group is determined to let energy companies know about it.
Don’t Pay UK says it wants one million households to refuse to pay their bills from October, when the regulator Ofgem will raise the cap on typical dual-fuel bills above £3,000 for the first time – and where it is expected to remain until at least 2024. On 26 August, Ofgem said it would raise the cap by 80 per cent to £3,549 for a typical home in October. The consultancy, Cornwall Insight, predicts it will rise again to £5,387 in January and £6,616 in April.
The group says it is inspired by a similar movement against the Poll Tax in the late 1980s and early 1990s. But what happens if you refuse to pay your energy bills – and how likely is Don’t Pay UK to succeed in its ambitions?
What is Don’t Pay UK’s plan?
The group is demanding that energy suppliers reduce energy bills to an “affordable” level – and is asking people to pledge to cancel direct debits to their energy providers from 1 October, when Ofgem’s price cap hike will come into effect, if that demand isn’t met. It cites recent results announcements from energy companies which show profits have soared alongside energy prices in the first half of the year: in the past two weeks, BP, Centrica and Shell have all unveiled huge rises in profits, as well as hefty dividends or share buyback schemes.
Don’t Pay UK says it will only go ahead with its plan to stop paying if it reaches one million pledges by October. Over 100,000 people have signed up in the time the group has been active, and it says numbers have doubled each week.
“Even if a fraction of those of us who are paying by direct debit stop our payments, it will be enough to put energy companies in serious trouble, and they know this,” it says.
[See also: The Brits refusing to pay their energy bills]
What happens if I do cancel my direct debit?
The charity Citizens Advice UK has warned of the consequences for refusing to pay bills. Direct debits are usually the cheapest way to pay for energy, and cancellation often incurs a fee, so check your supplier’s website to make sure you are aware of what that is.
Can my energy company disconnect my supply?
According to Citizens Advice, energy companies’ first move will be to transfer those who don’t pay onto a prepayment meter – which, as we have written, is often the most expensive way to pay for energy.
Before they do that, they must ensure they have “given you notice, given you time to pay any debts and offered you alternatives to being moved onto a prepayment meter”, says the charity. But energy companies are not allowed to do that if doing so “wouldn’t be safe or practical; for instance if an illness or disability means you’d be at risk if your gas or electricity was cut off”.
After that, the next step may be to disconnect your supply, although Citizens Advice says in practice this is “very rare”. Cutting off customers requires a warrant to enter people’s homes, says the charity. Once they have attained a warrant, they must give the customer seven days’ notice in writing.
What are the long-term consequences if I refuse to pay my energy bill?
In the first instance, being in debt to your energy supplier may affect people’s credit ratings, which impacts whether they can access a mortgage or loan. The company can also add interest to your debt.
If, after a few months, you still owe money, your debt could be passed onto a debt collection agency or the company could apply to a court to get a County Court Judgement (CCJ) against you.
It’s worth pointing out that for millions of households, this won’t be a matter of choice. Energy consultant BFY has suggested that as bills rise, more than half of UK households could be pushed into fuel poverty, with more than 10 per cent of their income going into paying their bills.
This article was originally published on 8 August and has been kept updated with the latest information.
[See also: Energy bills are set to surge again after price cap update]
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