Cost of Living – Energy Prices are turning up the heat on customer indebtedness

The Energy Price Cap Guarantee introduced in Oct 2022 comes to an end in April 2023 and will move a typical dual fuel bill from ￡2,500 per year to around ￡3,000 despite falling wholesale prices. The ￡400 Energy Bill Support Scheme has been softening the increase which covered October 2022 to March 2023. Even though energy wholesale prices have dropped since the summer of 2022 there is a considerable lag before consumer see the financial impact of this due to energy suppliers buying in energy advance (‘Hedging’). Therefore, it is likely that the price drop won’t be financial felt by consumers until the third quarter 2023.

What does this mean for consumers?

With a deepening cost of living crisis and higher energy bills its unsurprising that the level of energy debt has doubled since 2019 and currently stands at a reported ￡2.5bn which is the highest increase in over a decade. This leaves a lot of households unable to cope even with consumers cutting back on energy consumption.

?How do we support customers in difficult financial circumstances?

In recent weeks there has been a lot of media surrounding the force fitting of prepayment meters in vulnerable households. As per November 2022 Opos article entitled ‘The increase in Prepayment Meter installation and concern that consumers are being ‘Disconnected by the Back Door’ some customers are unable to pay in advance of their energy usage and subsequently ‘Self Disconnect’ which is to say that they are unable to top up the prepayment meter and therefore no longer have the ability to use Gas or Electric.

Being vigilant / proactive around spotting the signs of vulnerability is key to ensuring the appropriate customer treatment and payment method for each customer rather than a one size fits all approach to resolving consumer indebtedness.

Using Income and Expenditure customer data to tailor an affordable repayment plan is one way to help financially rehabilitate customers. The data can be captured via a telephone conversation or can be completed over a digital online application where the customer can fill out a form at a time that suits them. Opos supply customers with the ability to fill out an Income and Expenditure form online via the customer portal. The following link gives a view of the self-service options open to customers which allows them to manage their account alongside any change in financial circumstances. www.oposlimited.com