Energy regulator Ofgem's plans to offer consumers the chance to switch energy provider despite being up to £500 in debt to their current sup…
Energy regulator Ofgem's plans to offer consumers the chance to switch energy provider despite being up to £500 in debt to their current supplier has been welcomed.
The figure has been increased from the current debt ceiling of £200 and was hailed as a very positive move by price comparison site uSwitch.com.
Its director of consumer energy Ann Robinson said: "At the moment, prepayment customers with debts over £200 are stuck in a catch 22 – moving to a cheaper plan could help them save money, but they can't move because they are in debt.
"Raising the threshold in this way means that many more will be able to benefit from lower prices."
However, she suggested, the latest measures announced do not quite go far enough, as the same rules have not been brought in for those on standard meters who are in debt.
Ms Robinson noted the debt threshold for switchers varies between suppliers, making it harder for people to get a better deal.
The last few years have seen energy prices rise significantly and the cost of heating a home has left many in debt, while others have been struggling so much they have left the heating off even in cold winter weather.
For some, a raising of the switching threshold from £200 to £500 may be irrelevant as they owe a higher amount, which will often be part of a larger problem including other forms of debt like loans, overdraft and credit card debt.
Those who have been pleased by the Ofgem move include one of the main UK suppliers, British Gas.
A spokesperson declared the measure to be the "right thing to do" and said it was something the company has been seeking in the market to allow more people to get the best deal.
British Gas stated no customer has been disconnected for energy debt since 2010.
By Joe White