1. When you can be disconnected for arrears
The most important power which suppliers have for non-payment of energy bills is to cut off your supply. The power to disconnect is considered more effective than the right to recover money through the court system.
Unfortunately, suppliers sometimes find it difficult to distinguish between deliberate non-payment and those who would pay but are suffering financial hardship or other problems. However, disconnection should only be a last resort in extreme circumstances, when all other methods of recovery have failed. It should not be used as a standard method of debt enforcement.
In practice, very few customers are now disconnected as a result of a failure to pay and it is increasingly becoming an outmoded and disused tool. However, debt and arrears have increased significantly. According to Ofgem,1Ofgem, Debt and Arrears Indicators, Q2 2024 at between April and June 2024, there was an estimated £3.696 billion worth of gas and electricity debt and arrears, an increase of 43 per cent from the previous 12 months. For those with a gas repayment plan in place, average debts were £581, and for those with no repayment plan in place, average arrears were £1,329. For those with an electricity repayment plan in place, average debts were £687, and for those with no repayment plan in place, average arrears were £1,546. The proportion of customers repaying gas and electricity through a prepayment meter have increased to 55 per cent for electricity and 52 per cent for gas. Ofgem has amended its domestic standards of conduct, imposing greater obligations on suppliers to ensure that disconnection is the last resort and vulnerable situations and circumstances are better identified.
The declining number of disconnections
In 2003, there were 15,973 disconnections of gas and 1,361 for electricity.2Department of Trade and Industry Fifth Report, House of Commons, 1 February 2005 As a result of the increased consumer protection, in 2022 there were 13 electricity disconnections and six gas disconnections in the UK.3Ofgem, Customer Service Data, Q1 2022 - Q4 2022; This is an increase from 2021, where there were no disconnections for either electricity and gas. However, it represents a very small percentage of the number of customers in fuel debt during the same period and an even smaller percentage of all customers nationally.
It is important as a preliminary step to discover the cause of your arrears and identify whether you fall into a vulnerable group (see here). If you or someone in your household is vulnerable, inform your supplier as soon as possible, preferably before arrears arise.