Suppliers reduce pre-payment debt repayment maximum from 40% to 20%

Electricity and gas suppliers have reduced the maximum amount that can be deducted from a pre-payment meter top-up to repay debt, from 40% to 20%, under a Consumer Energy Charter that took effect on 1 December 2022¹. Suppliers signing the charter have also agreed to carry out a bespoke assessment of a customer's ability to pay¹.

The charter was developed by the Consumer Council with the Utility Regulator, the Department for Communities, the Department for the Economy and the gas and electricity suppliers². Suppliers signed up voluntarily¹. The Consumer Council states that under the existing Code of Practice overseen by the Utility Regulator, a supplier can deduct up to 40% from a purchase of electricity or gas to reduce debt, and that by signing the charter suppliers have agreed to halve that figure, meaning at least 80% of any new payment goes to securing additional supplies².

"From 1 December 2022, electricity and gas suppliers will support those in debt by reducing the debt repayment amount from a maximum of 40% down to 20%."

Consumer Energy Charter, Advice NI¹

Other commitments in the charter include:

Commitment	Detail
Pre-payment meters	Customers on a supplier's customer care register will not be moved onto a pre-payment meter unless they request it¹
Christmas period	Customers in debt will not be compelled onto a pre-payment meter between 16 December 2022 and 20 January 2023 unless they specifically request it¹
Credit customers	Suppliers will continue to assess ability to pay and, where issues are identified, look at reducing repayment rates or extending repayment timeframes¹
Debt collection	Processes, including those carried out by agents, to be strictly conducted in line with the Utility Regulator's Code of Practice for Payment of Bills¹
Hardship fund	Suppliers to make a financial contribution to a hardship fund for customers struggling to pay bills¹
Customer care registers	Suppliers to contact those on their registers and inform them of the best available tariffs¹

The Consumer Council states that contributions to the hardship fund will be made to a fund, to another charity of the suppliers' choosing, or to in-house funds managed by the companies themselves, and that the amounts donated are at each supplier's discretion². It adds that who is eligible for support and how they access it is being handled by the funds themselves².

The charter's protections extend to all households, but the Consumer Council says it expects customers in debt, or vulnerable because of age, disability or chronic illness, to be more likely to use them². Each supplier is required to maintain a customer care register storing details of consumers who merit special treatment on account of age, disability or chronic illness, and consumers have to choose to join it².

Why it matters for households

For pre-payment customers who owe money to a supplier, the change means a smaller share of each top-up is taken to clear debt, so more of what is paid goes towards gas or electricity. The Consumer Council states that at least 80% of any new payment will go to securing additional supplies². The reduction applies from 1 December 2022¹.

The charter also covers the Christmas period: suppliers will not compel customers in debt onto a pre-payment meter between 16 December 2022 and 20 January 2023 unless the customer specifically requests it¹. Customers on a customer care register are not to be moved onto a pre-payment meter at all unless they request it¹.

The commitments were made voluntarily rather than through licence conditions. The Consumer Council states that making them mandatory would have required changes to supplier licences, which can only take place after lengthy consultation, and that this would have put the timetable at risk². It adds that the Utility Regulator will monitor suppliers' behaviour to ensure they honour the commitments².

What happens next

Signatories will use best endeavours to implement the commitments as soon as they can and adhere to them to 31 March 2023¹. The Consumer Council states it will continue to monitor the situation and, should the need for the protections continue, will discuss further options with suppliers². No decision beyond 31 March 2023 has been reported.

Households dealing with energy arrears can find general information in our guide to debt help, solutions and your rights, and on regulation and policy.

Sources2 cited