With current lockdown coming to an end, we’ve been reflecting on the key impacts of the pandemic on energy suppliers and their customers.
Today’s challenges and priorities working with our industry contacts to review a difficult period and understand their priorities moving forwards.
The good news: we are yet to see the levels of debt across the sector that might be expected with an economic shock of this scale. The Coronavirus Job Retention Scheme has allowed many consumers to continue to make their energy payments. Meanwhile, fewer customers moving home, alongside stagnating customer switching through 2020, will have lessened the impact of these common triggers of debt in the customer lifecycle.
But April’s switching numbers were 40% up on last year. The housing and rental market is once again fully open for business. And the furlough scheme is due to close in September.
The numbers that describe pandemic’s economic impact on the UK are hard to ignore:
- Before Covid, the Money Advice Service estimated that more than 8 million of us were already falling behind with bill payments, and that 22% of UK adults had less than £100 in savings.
- New research from the Citizen’s Advice Bureau finds that 1 in 9 of us reports missing bill payments specifically as a result of coronavirus
- The pandemic has pushed 700,000 more people in the UK into poverty
So, is there a delayed surge in energy debt just around the corner? We think it’s likely.
Time to prepare?
Consumer affordability and debt have been at the top of the agenda in discussion with our supplier contacts. Most of all, we’ve been talking to them about being prepared – and how this can minimise the impact of increasing debt on customers and supplier operations.
Suppliers with a whole-business approach to debt prevention and management will be best placed to help their customers. That includes areas like a targeted smart metering programme, an effective meter read collection strategy, well-functioning operational and exception resolution processes, and resilient payment adequacy controls. With little control over whether a customer can pay, it will be how a supplier deals with each customer’s debt that will set it apart.
How can Engage help?
Our consultants can offer end-to-end meter to cash customer journey support to suppliers. Drawing on a wealth of operational experience, our debt management service includes the following steps:
- Root cause analysis of Supplier debt book, establishing operational/customer root causes and volumes, plus comparison to industry benchmarks.
- Investigation of root causes at key process points – such as meter reading utilisation, billing accuracy, payment adequacy, credit controls.
- Suggested rectifications by contributing factor, and estimation of potential debt prevention impact.
- Implementation support for relevant Supplier teams.
- Assurance of controls to meet Ofgem’s Ability to Pay principles.
Our clients trust us to deliver, and value our flexible, collaborative and benefits-driven approach. Please reach out to Tom Desmond if you would like to understand more about how we can help.
07925 376 171
Or Contact Us Here.