We welcome Ofgem's decision to extend safeguard tariff protections to more vulnerable consumers
Financial vulnerability and other indicators of vulnerability are often experienced together and become self-reinforcing if the right help is not available for consumers when they need it.
At StepChange, we have seen an increase in the number of people we help who have gas and electricity debts, and believe measures to help improve affordability for these consumers – many of whom have other vulnerabilities – are much needed.
In 2012, for example, we saw 17,443 people with electricity arrears: This amounted to around 11.5% of our clients who were responsible for an electricity bill. By 2016, this had increased to 33,974 people; or around 13% of our clients responsible for an electricity bill.
The picture is similar for gas. In 2012, 12,356 clients had gas arrears: representing 11% of all clients who were responsible for a gas bill. By 2016, this had risen to 20,874 people, around 12% of all clients with responsibility for a gas bill.
We welcome the focus on identification of eligible consumers, and Ofgem’s ambition to ensure as many consumers as possible are able to benefit from safeguard tariff protections.
As we will set out in our answers to the specific consultation questions below, we support the use of data matching to offer price protection to those on income-related, or disability-related benefits. However, as this is unlikely to identify all consumers who are vulnerable, we believe all suppliers should also be required to use other information they hold, such as data on debt and arrears, to identify those who should be offered safeguard tariff protection.
Throughout our response, we share data regarding our clients’ experience of energy bills to help explain our rationale for this position and to inform Ofgem’s approach going forward.