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British Gas has launched a new initiative to match energy bill payments made by its struggling customers.
The energy retailer has set aside £15 million for the ‘You Pay; We Pay’ scheme, where it will 100% match energy payments made by customers who are struggling to pay their bills.
Tens of thousands of customers that are eligible for the support will be contacted by British Gas, in what the retailer claims is a first-of-its-kind scheme for the energy sector.
British Gas said it will match payments made by those who can afford to pay something over a period of six months and there is no minimum level of debt balance for them to qualify.
The scheme launching in June will provide targeted support for those customers that are in or facing fuel poverty, helping them to either not fall into debt or to reduce existing debt.
Chris O’Shea, CEO of Centrica, parent company of British Gas, said: “While it’s been good news that food and energy prices are falling, for many households the cost-of-living crisis is far from over, not least because of the more recent increases in rent and mortgage costs.”
He added: “We know debt can have a corrosive effect on mental health. Most people want to pay their bills, but it can be very difficult to pay for what you need and clear debts.
“We want to try and help customers wipe the debt slate clean with this new approach, and to put our customers on a better footing to recover from this period of high inflation.”
O’Shea added that “this scheme isn’t a silver bullet” and repeated his calls for the government to introduce a nationwide social tariff.
“What we need to do is think differently about how we help people and I think this is the sort of approach that can have real and immediate impact on people’s well-being by helping them reduce the burden of debt,” O’Shea added.
Latest figures published by Oxford Economics reveal that the number of fuel poor households has more than doubled in past four years from 4.3 million to 8.9 million.
The analysis by Oxford Economics found that at the peak of the crisis more than two-fifths (41%) of people reported difficulty in paying their bills.
At the end of 2023, Ofgem revealed that the level of bad debt within the energy sector had risen to £3 billion.
Ofgem said the record high debt level was due to a combination of sustained high wholesale energy prices, and wider cost of living pressures, which have led to unpaid energy bills.
Richard Lane, chief client officer at debt advice charity StepChange, said: “We know all too well that the rising cost-of-living has been devastating, pushing more and more families into debt.
“We also know that many households will need support to clear arrears that have built up that will otherwise risk trapping them in debt and financial hardship.
“It’s great to see innovative approaches from companies like British Gas that have the potential to make a real impact for struggling households through this difficult period.”
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