What the energy crisis means for vulnerable customers

For many people struggling with their mental health and finances, there are a bunch of worrying challenges just round the corner — with the furlough scheme finishing, the universal credit uplift ending, increasing bills, drops in income, and more.  

This list has now been added to by an energy crisis — with rising energy costs pushing up prices for consumers, forcing some energy companies to go out of business, and resulting in some people being shifted from one energy supplier to another. 

It’s shaping up to be a very difficult time – and we need to talk about what suppliers collapsing means for customers with mental health problems.

It is almost certain that customers of collapsed suppliers will end up paying more for their energy. This will be a shock to struggling customers, who even before energy prices shot up, were telling us that they can’t afford their everyday costs- over a third of people with mental health problems tell us that their income is not usually enough to meet their everyday outgoings, and almost half say they often need to borrow money or use credit to pay for these. Coupled with the planned reduction in Universal Credit,  hundreds of thousands of people could be forced to choose between heating and eating this year. 

Energy firms should proactively offer forbearance to customers who are struggling. This flexibility should be offered to all customers experiencing payment difficulties as a result of price increases, not just those flagged as vulnerable.

Neil Lawrence from Ofgem (the regulator for the energy sector), responded to the recent collapse of two energy suppliers by saying:

“Although the news that a supplier going out of business can be unsettling, Utility Point and People’s Energy customers do not need to worry. Under our safety net, we’ll make sure your energy supplies continue”

Clearly this is a very challenging time for all energy companies, and it is understandable that there has been a focus on ensuring that the supply of energy to customers is uninterrupted.  But given the pressures that consumers are under, this shouldn’t be the sole focus for energy firms. In particular, for those energy companies that are acquiring suppliers that have gone bust, we want to take time to highlight what a change of supplier, an increase in price, and a shift in debt communications could mean for people with mental health problems.

Common symptoms of mental health problems can make engaging with essential services a stressful, sometimes overwhelming task.  More than half of people with mental health problems face serious difficulties using the phone to carry out essential admin. These problems also have a huge psychological toll — with more than one in five (22%) people with a recent mental health problem saying that they have had a panic attack as a result of dealing with an essential services provider. 

A change in supplier will cause some people an incredible amount of stress, and anxiety; they may put off getting in touch to switch tariffs or sort out account functions. Suppliers must remember that it’s not just about committing to uninterrupted supply, but also uninterrupted accessibility.

Customers who have previously disclosed a mental health problem to their energy supplier may be concerned that these details will not have been transferred across to their new supplier and will be worried about having to have another difficult conversation before getting the support they need.

“<Energy provider> told me that I was not registered as a vulnerable person with them, even though I had registered. I was to re-register and that <energy provider> would decide if I was vulnerable. I was devastated and needed medical support due to my distress.” Expert by experience

The energy suppliers who acquire customers from collapsed suppliers have a huge responsibility on their hands.  How they deal with customers who struggle to keep up with their bills will play a big role in how those customers cope with being in debt. More than 420,000 people in problem debt consider taking their own life in England each year, and more than 100,000 people in debt actually attempt suicide. Sudden triggers like the intimidating and threatening letters people receive from lenders can put people at risk of becoming suicidal.

Money and Mental Health believe the Supplier of Last Resort must take a proactive approach to manage all these challenges for customers with mental health problems by:

• Sensitively supporting customers who disclosed a mental health problem to their previous supplier. For example, letting them know what services they have in place to support them.
• Taking active steps to support customers affected by price increases.
• Communicating with those in problem debt in a way that minimises distress, and maximises help seeking behaviour – taking care to offer extra support to consumers who are experiencing multiple collection activities

For energy suppliers who would like help making this proactive approach to support their new and existing customers through this challenging time, our Mental Health Accessible team would be happy to offer additional guidance. If you would like more information, please contact [email protected].