Ofgem warns of ‘bill shock’ on the horizon

Ofgem has warned of a potential shock to consumers after research revealed only 35 per cent have thought about the impact of coronavirus on their energy bills.

The regulator’s customer and behavioural insights team carried out a poll to understand the experiences of domestic energy consumers during social distancing in relation to energy use and bills

The research reveals the extent to which people are reporting being under financial strain. Almost a quarter (23 per cent) feel their finances are negatively impacted and 44 per cent expect their financial situation to deteriorate in the next six months.

More than half (56 per cent) say they are using more energy than normal for the time of year, rising to 75 per cent among families with children. Despite this, only 35 per cent have given consideration to the roll-on impact to their bills, prompting the regulator to warn of potential “bill shock” further down the line.

Just under 70 per cent of electricity PPM customers need to top up their meter in person, 33 per cent of these worry about topping up as their usual payment point is closed, while 34 per cent worry about topping up because their income has been reduced.

A fifth (22 per cent) of PPM customers say they have already experienced problems with topping up their meter. Of those experiencing problems:

  • 13 per cent say it is because their local shop is closed
  • 10 per cent have reduced the amount they usually top up
  • 8 per cent have run out of credit and can’t afford to top up
  • 7 per cent are self-isolating at home due to social distancing
  • 6 per cent report there is no transport to their local top-up shop

Many of those PPM customers have not sought help, with almost half (47 per cent), reporting having done nothing at all.

Just over a third (37 per cent) of pre-payment meter (PPM) say they recall receiving coronavirus-related communications from the supplier.

Last month Citizens Advice conducted similar research which found 13 per cent of energy customers have fallen behind or expect to fall behind on their energy bill payments due to coronavirus.

The survey of 2,000 customers found 4 per cent in total had already fallen behind, while 9 per cent said they expected to fall behind.