Consumers in Great Britain moving to a new home will have about two weeks to set up an energy account before their lights go out, under plans to cut growing gas and electricity debt.
Energy meters could soon be remotely switched to prepayment mode when the previous resident moves out, under proposals put forward by the industry regulator, leaving the next resident £30 of credit to settle into their home.
However, once this amount has been used, which on average would take about a fortnight, they would be left in the dark unless they had set up a new account with an energy supplier.
The plan to nudge households to set up their accounts sooner is part of an attempt by the regulator, Ofgem, to tackle Britain’s record energy debt, which has climbed to almost £4.5bn, or more than twice as high as it was before the energy crisis.
Households typically take about 70 days after moving to a new address to set up an account with an energy supplier, meaning that any gas and electricity used in this time is charged to “the occupier”.
This can lead to households building up energy debt without knowing it, resulting in distressing, unexpected costs – or bills going unpaid.
Britain’s unpaid debts add about £52 a year to the average energy bill to help recoup the money owed to gas and electricity suppliers, dozens of which went bust during the energy crisis, which began in 2021, as the sudden rise in costs outpaced payments.
“The growing amount of debt in the energy system is a significant challenge that affects us all,” said Charlotte Friel, a director at Ofgem. “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.”
She said reform of the home-move process was overdue and called on consumer groups, suppliers and charities to share their views on the plans in Ofgem’s consultation before early next year.
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“Moving home is stressful enough – add energy debt and it’s worse. That’s why our new proposals aim to stop debt in its tracks, tackling today’s problem and preventing tomorrow’s,” she said.
Figures released by Ofgem in October showed about 1.9m energy accounts were closed over the past five years, with outstanding credit balances totalling £240m left unclaimed. It urged anyone who has moved in recent years to check whether they are owed a refund from their previous account.
