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Many young people and families use Pre-payment meters due to concerns about energy debts.
According to the Competition and Markets Authority (CMA), pre-payment customers pay on average 22% more than the cheapest direct debit deal. The Children’s Society study found that 30% of families have pre-payment meters.
Half of customers who go into debt are put on pre-payment meters which, for many, will inevitably mean an increase in bills.
What to do if in arrears?
Energy arrears are a priority debt, so need to be paid before credit cards. Other priority debts are council tax and TV license
Pay off your debt through your benefits
You might be able to repay your debt directly from your benefits through the Fuel Direct Scheme.
A fixed amount will automatically be taken from your benefits to cover what you owe, plus an extra amount for your current use. It can be more convenient than having a prepayment meter fitted (which your supplier might try to do if you can’t agree a payment plan) and you won’t risk running out of gas or electricity.
To be eligible, you must be getting one of the following benefits:
- Income-Based Jobseeker’s Allowance
- Income Support
- Income-related Employment and Support Allowance
- Pension Credit
- Universal Credit (but only if you’re not working)
Contact the Jobcentre and let them know you want to set up Fuel Direct. They’ll contact your supplier and tell them you want to pay off your debt under the Fuel Direct Scheme - your supplier must agree to it.
Your supplier will set up the repayments and let you know how much you’ll be paying.
Further debt advice
If you can’t come to an agreement with your supplier about repaying your debt, or you’re not happy with the option they’ve given you, contact the Citizens Advice consumer helpline for advice.
You can get help and advice about your debts from Stepchange or the National Debtline.
Top 10 Energy Saving Tips
1. Turn off electrical appliances – leaving them on standby wastes energy and money. You could save around £85 a year by switching them off.
2. Turn down the thermostat by a degree – it’s simple but it could slice £65 off your bills each year. Chances are you won’t notice the difference.
3. Get insulated – the Energy Saving Trust reckons cavity wall insulation could save you up to £160 per year, and loft insulation could save you about £140 a year. They initial outlay can be expensive, though, so it could be a few years before it pays for itself.
4. Invest in a lagging jacket – to put on your hot water tank and make it more energy efficient. It’s a good idea to insulate pipes while you’re at it.
5. Wash clothes at 30 degrees instead of 40 – it’s easy to do and could easily reduce your energy bills. Most washing powders perform well at lower temperatures.
6. Descale your kettle – to make it work more efficiently and last longer. Fill the kettle with equal parts water and vinegar and let it soak for an hour. Rinse it out a few times before using it again.
7. Replace your light bulbs – using an energy saving bulb instead of a traditional one could save you around £3 a year, or £50 over the lifetime of the bulb, says the Energy Saving Trust.
8. Upgrade your boiler – although it won’t come cheap, replacing your boiler could save you hundreds of pounds a year on your bills. Boilers are rated on a scale of A to G, with A being the most energy efficient. So if yours is at the lower end of the scale, it could be time to replace it.
9. Bleed your radiators – this will make your heating more efficient and keep your bills down.
10. Switch your energy tariff – using comparison sites such as uswitch.
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