Moving home? Energy debt could be avoided under new plans

Moving home is stressful enough and the prospect of getting into energy debt just makes it worse.

Ofgem, the energy regulator, is proposing a change that could make things easier.

You could get two weeks before your energy is cut off

Under the plans, when you move into a new home, you could have around two weeks to set up your energy account before your supply is switched off. This gives you time to choose your supplier, pick the right tariff, and avoid racking up debt without even knowing it.

This is part of Ofgem’s plan to “reset and reform” energy debt, helping people manage bills better and avoid system pitfalls that make it easy to fall behind.

What’s wrong with the current system?

With the current system, when you move in, energy accounts are switched to ‘occupier’. Energy keeps flowing, but bills start building up under anonymous accounts until you contact a supplier to register.

• on average, it takes 70 days for someone to set up a new account
• that means you could unknowingly build up debt before you even get your first bill
• suppliers say this could make up as much as a third of all energy debt, which has now reached £4.48bn, costing households an extra £52 a year

Ofgem says this is very different to how it works in other European countries, where people have to set up energy accounts to get on supply.

How will the new system work?

Under the new plan:

• When someone moves out, the meter at your new home will be switched to prepayment mode remotely.
• You’ll need to contact a supplier and set up your account with your preferred tariff.
• You can talk about your situation right away, so suppliers can offer the right support from day one.

Charlotte Friel from Ofgem says: “The growing amount of debt in the energy system is a significant challenge that affects us all. For those living with the stress of debt, for households paying higher bills to cover historic debts, and for an industry carrying the weight of unpaid costs - the impact is huge.”

“Major reform of the home-move process is overdue. These proposed changes will benefit all energy consumers and bring us in line with other comparable markets. But we can’t do this alone, so we’re calling on suppliers, consumer groups, and charities to share their views before we launch this next year.” 

Need help with energy bills right now?

If you're struggling to pay your energy bills, here are some things you might be able to do:

• get emergency credit if you’re on a prepayment meter
• apply for a grant or hardship fund from your supplier
• join the Priority Services Register for extra support

To save on energy and reduce your bills, have a read of our 50 smart energy-saving tips.

Also, find out what happens when you have energy arrears and how to deal with the situation.

We can check you’re getting all the benefits you’re entitled to and help you create a realistic budget.