16 Nov 2021 | Posted In Money advice news

A new report from Citizens Advice called ‘Taking too much?’ looks at the experience of benefit deductions to pay for energy and other debts. It comes off the back of concerns that in the current circumstances following the Covid-19 pandemic, many more households may fall behind on their energy bills.

If they do fall into debt, one way people on Universal Credit can manage their repayments is through third party deductions. This means that if someone is in debt to their energy supplier, the Department for Work and Pensions (DWP) takes money directly from their benefit payment and gives it to the energy supplier. People using deductions pay a fixed amount each week to cover their debt and a further amount to cover their ongoing energy usage.

Citizens Advice carried out research with energy suppliers and qualitative interviews with people using the deductions scheme to pay for energy debt. Through this research, they found that while the people they spoke to were generally positive about the scheme, there were some key pain points in the process:

  • People feel worse about deductions if they feel they didn’t provide consent.
  • Keeping track of the payments can be challenging and people aren’t sure who to go to if they’re struggling to manage.
  • When people pay off their debt there can be a lack of support to help them stay out of debt in future.

Some key changes Citizens Advice recommends in this report are:

  • Repayments that are based on a person’s ability to pay
  • Clearer guidance on the scheme
  • More support to help people get back on track after they finish paying their debt

Read more here.