Cost of living crisis: What happens if you refuse to pay your energy bills

UK households are being urged to refuse to pay their energy bills this October

The cost of living crisis is gripping the UK and given the recently updated energy price cap forecast from the independent analysis body, Cornwall Insight, it is only due to get worse.

The End Fuel Poverty Coalition has predicted that 9.2 million households will be in fuel poverty this Autumn, rising to 10.5 million households in January when the price cap is expected to reach an average of £4,266 per annum. All these predictions are very depressing, at a time when wages are not going up and the government is not willing to tackle the ongoing crisis.

This is why a movement has been set up and is encouraging people to refuse to pay their energy bills. Thousands of people have pledged their support to the Don’t Pay UK campaign and it is gaining momentum.

However there may be some big risks associated with refusing to pay your energy bill and a lot of misinformation out there, so we’re giving you the information needed to make an informed decision on whether to go ahead or not.

Why take this action?

Historically, civil unrest leads to certain bodies taking action. Refusal to pay the poll tax in the 1980’s lead to the downfall of the government and a reversal of the policy, which is why we are now being asked to gather together and pledge to refuse to pay our energy bills in the face of them becoming unaffordable for the majority of UK households.

We understand that taking this action is sending a message to the energy companies and ultimately the government, who need to step in, but this action could backfire on the individual.

Who supplies the energy?

In order to direct anger to the correct place, you need to distinguish between the energy producer and the energy supplier.

The energy suppliers or retailers are those who you are in direct contract with. These are companies such as Octopus, British Gas, etc. They supply our energy to us on tight margins, hence why last year so many smaller energy suppliers went bust because they could not afford the wholesale gas prices. Part of this reason was that they could not (or were unable to) pass the added cost onto the customer due to fixed tariff rates and the energy price cap.

The energy producers are the big companies like Shell and BP. These are the ones recording massive profits who are selling oil to the suppliers/retailers, who then sell it onto us.

What could happen if you refuse to pay your energy bill?

Just be aware that there is no correct way of not paying your bills. This is a phrase that has been banded about but above all, your refusal to pay your energy bill as a customer, is a breach of your terms and conditions with your energy supplier.

If you fail to pay your energy bill on time and ignore the subsequent reminders, then the energy supplier could take a number of actions against you:

• You could be cut off from your supply
• You will likely be offered a meter which normally attract higher standing charge rates
• You will be placed in debt arrears which could impact upon your credit score – however, read our blog post on credit scores for more information on this
• You may be charged late fees in accordance with your contractual agreement, which would take you further into debt
• Ultimately, not paying your energy bill could lead to a small claims court action and result in a CCJ being attached to your name

Should you cancel your direct debits?

For those who do pay their energy bills via direct debit, you could cancel the monthly charge, as is well within your right. However, whilst this may cause the energy supplier an administrative nightmare (especially if you are one of millions who do so), it could also incur late fees and you may be disadvantaging yourself. Paying via direct debit methods is usually 6% cheaper than paying quarterly.

We are in a situation where the energy price cap is increasing exponentially, with many households worrying about how they are going to pay their bills, yet quarterly accounts from the big energy producers show that record profits have been reached and big payouts are being made.

Are there any other options?

If you find yourself in a position where you are unable to pay your energy bill, then contact your energy supplier in the first instance. Put the ball back in their court and see what they can do. Ultimately, they would rather see some payment come in, rather than a complete refusal.

Explain your situation to them, give them a genuine number of what you are able to afford to pay and let them come up with a realistic plan to support you.

If they do not provide this, then you can take them to the ombudsman for free. At least you have shown that you are willing to pay something rather than a complete refusal.

If you are in a position where you have existing debts and are worried about being able to afford your rising energy costs, then please contact us to discover if we are able to provide advice or point you in the right direction.