Cost of living crisis: What to do if you can't pay your bills

With the cost of energy rising rapidly, what should you do if you cannot afford to pay your bills?

With the cost of energy rising rapidly, what should you do if you cannot afford to pay your bills? - Credit: Archant

Forecasters have warned that annual energy bills could reach nearly £5,300 by April, according to the bleakest outlook yet for households.

The latest prediction comes from experts at energy consultancy Auxilione who say bills could rise to £4,538 in January and peak at £5,277 in April.

Campaigners are calling for a mass protest of people refusing to pay their bills on October 1, when the energy price cap is first set to increase.

A homeowner turning down the temperature of a gas boiler in the face of the cost-of-living crisis

Regular meter readings can help keep track of your energy usage - Credit: PA

The Don't Pay Group is demanding a reduction of bills to an affordable level and is hoping for a million people to sign their protest pledge before going ahead with the plans.

What happens if you don't pay your energy bills?

If you stop paying your bills and you don't try and negotiate with your supplier, they might threaten to disconnect you, according to Citizens Advice. 

This is a worst-case scenario and it is more likely they will force you to install a pre-pay meter.

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If your supplier doesn’t disconnect you, you should still arrange to pay what you owe them.

This protects you from being disconnected in the future.

The supplier could also pass your details to a debt collection charity, according to debt charity Step Change.

Many suppliers also charge extra fees for late payments which would be an additional cost.

Energy arrears are a "priority debt" which means they have to be paid off before things such as credit card bills.

What should you do if you cannot afford your bills?

Taking regular meter readings is helpful to keep track of how much energy you are using.

If you have fallen into arrears, Citizens Advice say you should try agree a payment plan with your supplier.

They say: "You’ll pay fixed amounts over a set period of time, meaning you’ll pay what you can afford. The payment plan will cover what you owe plus an amount for your current use.

Coins and notes.

Energy bills could reach £5300 annually by April - Credit: PA Wire/PA Images

"Your supplier must take into account how much you can afford to pay - give them details about your income and outgoings, debts and personal circumstances.

"They will also look at how much energy you’ll use in future - they’ll estimate this based on your past usage, but give them regular meter readings to make this more accurate."

Where you can get help

The government has announced a series of cost of living payments designed to help ease the financial burden.

There will be a £400 energy grant for all households in the UK. 

This discount will be made automatically by your energy supplier in monthly instalments, with a reduction of £66 in October and November, and of £67 a month from December to March 2023.

The lowest income households will also get £650 and pensioners will receive £350 support.

People receiving disability benefits will get an additional £150.

A number of energy companies offer grants and schemes to help pay off bills which are open to anyone, even if not a customer.

Charitable trusts also offer grants to help pay off debts.