Disconnection when you pay in instalments
If you have an arrangement to pay in instalments, either for your current supply only or for your current supply plus an amount for arrears, the supplier is not entitled to disconnect for arrears while you keep to the terms of your agreement, since you are paying the amounts requested in writing.1Sch 2B para 7(5) GA 1986 If you miss a payment, the supplier is entitled to disconnect for arrears from 28 working days after the date of your missed payment, but only if there are still charges due (see above), and providing you have been given seven working days’ notice of the intention to disconnect. If your account is in credit, based on a reading of your meter and allowing for any standing and other charges, the supplier is not entitled to disconnect your supply.
In practice, rather than actually disconnect, suppliers are more likely to try to impose a prepayment meter. The supplier has to inform you of its intention to disconnect, subject to the notice period above, before being entitled to install a prepayment meter no less than 28 days from the date of your missed payment. A prepayment meter may be installed with your agreement at any time. This may also carry additional costs. If you have a smart meter, it can be recalibrated remotely from credit to prepayment mode. However, suppliers are not permitted to install a prepayment meter or recalibrate a smart meter to prepayment mode for certain groups of vulnerable people (see here). See here for how to resist a prepayment meter. Alternatively, your supplier may decide that a security deposit is required just in case you do not keep to your agreement to pay by instalments.2s20(1)(a)(b) EA 1989; s11 GA 1986 (as amended); Condition 27 SLC The supplier must write to you to inform you of this. The supplier must give you notice that it intends to disconnect if you do not pay a security deposit. You can ask for a prepayment meter if you do not wish to pay a security deposit, unless a prepayment meter is not ‘safe and practicable in all the circumstances’ or it is ‘unreasonable’ to expect you to pay one.3Condition 27.3 SLC See here for more about security deposits. If the breakdown of your instalment arrangement has occurred because you cannot afford to pay, you may be able to arrange an alternative, more suitable, payment plan or payment method.4Conditions 20.1, 27.5 and 27.6 SLC Remember, under their supply licence conditions, suppliers are required to make instalment arrangements based on what you are able to pay.5Condition 27.8 SLC You can write to your supplier with a completed budget sheet and letter explaining what you can afford to pay (see here). In any event, the supplier must offer you a prepayment meter as an alternative to disconnection and as a payment option,6Condition 27.9 SLC providing you do not fall into the high or medium risk group (see here),7Ofgem, Guidance: PPM (safe and reasonably practicable), 13 September 2023, para 3.7 it is ‘safe and practicable in all the circumstances’ (see here – ie, not just at the point of installation but forthe entire time it is used) and is ‘calculated in accordance with’ what you are able to pay.8Condition 27.6(a)(iii), 27.8, 27.8A and 27.9 SLC Payment arrangements fail for a variety of reasons. It might have been the wrong arrangement from the outset: the commencement date may not coincide with the receipt of income; the frequency of payments may not coincide with the receipt of income; or the amount for consumption or arrears may be set too high (or too low) and be unaffordable. There may have been a change in the household, lifestyle or appliance use. You may have been ill or in hospital. Failing to keep to an agreement should not automatically preclude the possibility of another one being arranged – it is essential to establish why a previous arrangement failed.
Under their supply licence conditions, suppliers are required to make instalment arrangements based on what you are able to pay.9Condition 27.8 SLC A supplier found to be contravening the relevant licence conditions can be faced with regulatory action and enforcement by Ofgem. You should be prepared to raise a formal complaint if you feel that a supplier is failing to meet its licence conditions. Fuel Direct (see here) should also be considered as a payment option. Suppliers are expected to use ‘where available, a means by which payments may be deducted at source from a social security benefit received by that customer’.10Condition 27.6(a)(i) SLC The use of the words ‘where available’ suggests that a supplier may be at fault if it overlooks or ignores this option.11See Condition 27.5 and 27.6 SLC Fuel Direct deductions usually involve suppliers applying to the DWP for deductions for both ongoing consumption and arrears. However, since 1 April 2023, new deduction applications for ongoing fuel consumption, or a change in existing deductions can only be made if a supplier obtains your consent first or you apply for it yourself.12DWP, Guidance: guide for energy suppliers (‘Fuel Direct’), 12 September 2024, at ; Social Security Benefits (Claims and Payments) (Amendment) Regulations 2023