How well do energy suppliers support customers struggling with bills?

For many, the pressures of affording essential gas and electricity are far from over. The Bevan Foundation has been looking into whether suppliers are doing enough to help. Our Policy and Research Officer, Joel Davies, tells us more

We are still living through a crisis of energy affordability in the UK, despite recent reductions in bills. The levels of consumer debt in the sector are staggering; total energy debt reached a record £3.3bn in the first quarter of 2024. And the data show that the pressure is disproportionately felt by a significant section of society for whom individual debt amounts are deepening steadily. For the almost 1 million electricity accounts in arrears which do not have a repayment arrangement with their supplier, the average debt is £1,452, up almost 20% even on the same period last year.

It’s an inescapable fact that too many still cannot afford essential energy costs, while the legacy of the cost increases of the past few years—not just in domestic energy but in food, clothing, and housing—have pushed many over a precipice of financial hardship from which it is difficult to escape.

Emergency government support for energy bills has been withdrawn without being adequately replaced, and the welfare system has not for some time performed its basic function of covering essential costs.

Domestic energy suppliers have arguably been left with not just a moral but also a substantive responsibility to plug the gap. Yes, they constitute just one section of the wider energy sector, and excessive profits ‘upstream’ in generation and distribution should be properly taxed and redistributed. But there are good reasons to focus our scrutiny on suppliers.    

What support do suppliers offer?

There are two major programmes of redistribution amongst billpayers aimed at tackling energy affordability—ECO and the Warm Home Discount scheme (WHD). The ambition of both has been significantly expanded in recent years, and together they are now worth over £1.5bn a year. Crucially, suppliers are obliged to take part in these schemes and have significant discretion in their administration. This is particularly true in the ‘Industry Initiatives’ element of the WHD, worth around £45m in 2022/23, which encourages suppliers to innovate to promote the long-term reduction of fuel poverty.

Both through the WHD and their own entirely voluntary funding, suppliers conduct support activities which include, amongst others:

• Debt write-offs
• Grants for ongoing energy costs (often in the form of fuel vouchers)
• Free products and services (e.g., boiler repair/replacement, heated blankets or energy saving bulbs or sockets)
• Funding frontline advice services to support those at risk of fuel poverty

Is the support effective?

Our research has found that while supplier support is often likely to provide a crucial lifeline for those who are able to claim it, there are issues and gaps to be addressed. In workshops, we engaged with those who have the most experience in navigating and accessing the schemes–those in the energy advice sector. This is a selection of what we learned:

• They are not sufficiently transparent: While some suppliers are reasonably candid about the support they can offer, with others, it is difficult to establish exactly what they do, and how much money is put towards it.
• There are significant barriers to claiming: Eligibility criteria and application processes can appear complex, and suppliers rely heavily on digital administration of schemes. It is likely that this means many of those in need will disengage.
• Help does not reach everyone eligible for it: Funds can be operated on a first-come, first-served basis – once they are depleted every year, significant sources of support are closed off. It’s inevitable that funds are limited, but the lack of a comprehensive strategy which brings together supplier support with wider societal efforts to tackle fuel poverty creates a system of winners and losers.
• They place a heavy burden on community and support organisations: Advisers are put under time and cost pressures when they help clients to apply for support from suppliers. This includes time spend on hold, and resorting to dipping into funds intended for other purposes, even when they know their client is likely eligible for supplier support. Many felt that there should be priority access for organisations who represent those in or at risk of fuel poverty.  

The Bevan Foundation will publish a report setting out our findings on supplier support offerings in full towards the end of August.