58% of Households ration electricity and gas use over energy bill fears – how can energy suppliers help their customers?
New research from comparethemarket.com has revealed that 58% of households in the UK have rationed their energy use as energy bills rise thanks to the hike of the Ofgem price cap and issues caused by the Covid-19 lockdown. We look at some ways an energy supplier can help support their customers.
The young are affected the worst
The research has also further highlighted that it is the young people of the UK who are suffering most when it comes to paying their energy bills. 54% of those aged between 18-34 said that they had rationed their energy use, a stark contrast to just 19% of over 65s who said the same.
58% of all households said that they were concerned how much the recent cold weather would impact their energy bills and thanks to the Covid lockdowns the majority were worried over the costs of having to stay at home.
In this category too it was the young hit the hardest due to more of that age group being put on furlough than any other. 68% of all those surveyed between the ages of 25 and 34 said that the lockdowns had put increased pressure on their energy usage.
With a combination of cold weather, increased time spent at home and Covid-19 restrictions the average homeowner has seen their energy bills rise £113 more than usual for the first quarter of 2021.
Balancing energy bills with food bills
Perhaps of most concern for energy suppliers and the wider industry is the revelation that over a third of respondents said that if energy bills rose sharply, they would have to consider either cutting back on their energy use or slash spending on food.
The Covid pandemic has seen record numbers of consumers struggling to pay their energy bills, an issue that has put increased pressure on many energy suppliers’ revenues. If prices rise further, then this could become an even greater issue.
Also read: Energy Billing – How does it work?
Energy Price cap
Ofgem returned the energy price cap to pre-pandemic levels of £1,138 a year in April resulting in millions of households paying higher energy bills.
One of the main reasons the regulator raised the cap was to try and help energy suppliers struggling to cope with the large number of customers failing to pay their energy bills or been given payment breaks as a result of the pandemic.
To offset this the regulator is encouraging consumers to shop around for cheaper tariffs.
“Household finances are in a fragile position as a result of the pandemic, with the combination of a cold winter and increased energy use due to lockdowns being particularly strenuous for households that were already struggling. With spring now upon us and warmer weather approaching, usage will drop off, easing the strain on finances,” said Peter Earl, head of energy at comparethemarket.com.
Also read: Ofgem Hikes Energy Price Cap raising Energy Bills to pre-pandemic levels
How can energy suppliers help their customers?
Helping your customers that are struggling benefits both them and your energy supply business by increasing their loyalty and improving your reputation which in turn will attract new customers.
Energy suppliers can ensure that their customers do not get into financial difficulty when it comes to paying their energy bills by making it clear to them what products and services you offer and how they are appropriate to their needs and circumstances. For example, a customer who has struggled to pay on a certain tariff could be moved to one that better fits their situation.
There are numerous support mechanisms in place for struggling customers so make sure to clearly highlight how they can be accessed and where they can find support.
Perhaps the most important way an energy supplier can help their customers is to make it easy for them to contact them and act promptly to any issues. If the supplier makes errors, make sure they are fixed promptly and be honest about it.
Energy suppliers also need to identify their most vulnerable customers and add them to the priority services register. A customer can be signed up to the register if they are:
- Of pensionable age (currently 65 or over)
- Are disabled or suffer from a chronic illness
- Have a long-term medical condition
- Have a hearing or visual impairment or additional communication needs
- Are in a vulnerable situation including customers with certain mental health issues that may impact their understanding of their energy bills
- Customers who are unable to top-up a prepayment meter due to an injury
- Temporary circumstances where they may need extra support
- Families with children 5 years old or younger
Also read: Add your Customers to the Priority Service Register with Dyball’s CRM
Whether you’re looking for electricity and gas systems or support on starting an energy supply company, Dyball Associates Ltd can help.
Further Reading
The key compliance and regulatory issues new energy market entrants need to know
How to convince consumers to switch to a smaller energy supplier
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