Staying Connected: how energy suppliers can help and support prepayment customers who self-disconnect

Staying Connected 629 KB seeks to understand the extent to which energy suppliers help and support prepayment customers who tell them they have self-disconnected.

We have estimated that 15 per cent of all PPM users self-disconnect from their energy supply at some point. Some self-disconnect regularly or occasionally for short periods of time, either as a means of budgeting or because they have forgotten to top up. However, some consumers self-disconnect because they simply do not have enough money to top up. Our research shows that these consumers, the most financially constrained, self-disconnect for the longest periods of time.

We are concerned that an increasing number of consumers are at risk of self-disconnecting. As more consumers struggle to meet the costs of everyday living, the number with a prepayment meter also continues to rise. In 2014, approximately 300,000 new electricity PPMs and 320,000 new gas PPMs were installed in Great Britain. Around 60 per cent of these were installed to recover a debt. Compounding this, the Competition and Markets Authority recently revealed that prepayment customers are paying more than they should due to a lack of competition in this market segment.

Between October 2015 and February 2016, the Citizens Advice Extra Help Unit helped 220 consumers in vulnerable circumstances who could not afford to top up their prepayment meters. With the Extra Help Unit, we have developed a good practice 226 KB guide for energy suppliers, outlining actions that they can take to help customers who tell them they have self-disconnected.

We carried out an analysis of all the self-disconnection cases received by the Extra Help Unit in winter 2015-16. Our research findings present a mixed picture. We found that, in most cases, energy suppliers will provide emergency assistance to get consumers back on supply when they have self-disconnected. This generally takes the form of a discretionary top up, which is later recovered from the consumer in weekly installments. But suppliers are much less proactive at offering solutions that could help prevent further financial difficulties. They generally consider energy trust funds, the Warm Home Discount, debt advice referrals and energy efficiency measures when prompted. In a handful of cases, suppliers take extra steps to actively help consumers benefit from these measures. We would like all suppliers to consider how they can improve their policies and processes so that consumers who self-disconnect are provided with a level of support that is consistent with the acuteness of their situation.