£7bn owed on bills as millions miss cheaper water and broadband tariffs

Water, broadband and phone companies offer cheaper 'social tariffs' to millions of people on benefits such as universal credit and pension credit. The National Audit Office (NAO) found that most households struggling with their bills do not know this help exists. The spending watchdog said more than £7bn in bills and charges was owed to water, broadband and energy companies by March last year, and the BBC reports that estimates suggest the total has grown since.

The NAO said only a third of eligible broadband customers were aware of social tariffs. Among water customers who were struggling to pay, the figure was 39%. According to the Daily Mirror, millions could save hundreds of pounds a year, and far fewer people use these tariffs than are thought to qualify.

To get one, you usually ring your supplier and show proof of your benefits. The BBC points out a catch: the lower bills are often paid for by higher charges on everyone else. There is still no social tariff of any kind for gas and electricity.

How social tariffs cut your bills

Social tariffs are sometimes called essential or basic tariffs. They give people who would otherwise struggle to pay a lower bill for exactly the same service. The BBC stresses that they are not price promotions designed to win new customers, and the Mirror describes them as discounts on essential services rather than temporary offers. The terms vary from one supplier to the next.

For broadband and phone, the regulator Ofcom keeps a list of the social tariffs that providers offer. The BBC says that if your provider is on that list and you qualify, you can switch to its social tariff free of charge, and leaving your existing contract will not cost you anything either. For water, every supplier in England and Wales now runs a social tariff. Who qualifies and how much help you get differ between companies, and the Consumer Council for Water (CCW) publishes a list.

Regulators are under pressure over how well this help is promoted. Gareth Davies, head of the NAO, said regulators 'have made progress to support consumers, but they're not keeping up with the pressure now facing millions of households'. Sir Geoffrey Clifton-Brown, who chairs the Commons Public Accounts Committee, said financial support was 'poorly promoted' and that basic billing errors were 'pushing households further into debt'. The regulators told the BBC that helping vulnerable customers was a priority and that reforms were kicking in, but they accepted there was more they could do.

Who can claim and who is left out

According to the BBC, if your name is on the contract and you receive benefits such as universal credit or pension credit, your company may be able to give you a discounted deal. Citizens Advice has highlighted how little people who qualify know about social tariffs. The Mirror reports that many households only find out about the discounts after they have already missed payments.

For water, it matters where you live. Scottish Water does not offer a social tariff, although the BBC says other options are available. In Northern Ireland, people are helped through the Community Care Register. Gas and electricity customers miss out everywhere, because there is no social tariff for household energy, despite pressure from some, including the regulator Ofgem, for one to be introduced.

That gap hits people like Linda, aged 70, who told the BBC her debts came to hundreds of pounds and her state pension never stretched far enough to cover her utility bills. 'I'm repaying in instalments, but the debt is not going down,' she said. Another pensioner said the credit on her energy meter often ran out three or four days before her pension arrived, but her supplier had been helpful once she told them she was struggling.

Key numbers

• More than £7bn: the amount owed in bills and charges to water, broadband and energy companies by March last year, according to the NAO.
• A third: the share of eligible broadband customers who knew that social tariffs existed.
• 39%: the share of water customers struggling to pay who were aware of social tariffs.
• £1,000: how much less, on average, energy customers on repayment plans owed than customers in debt without one, the NAO said.
• 118%: the rise in household energy debt since 2021, which the NAO said followed Russia's invasion of Ukraine.

What regulators are being told to do next

No change to who qualifies or what the tariffs cost has been announced. The NAO report looked at the work of Ofgem, Ofcom and Ofwat. It said they could do better at identifying vulnerable customers and promoting the support on offer, and that awareness of the Priority Services Register was still low. That UK-wide register helps utility companies identify and support customers with extra communication, access or safety needs, such as during a power cut.

Sir Geoffrey said the regulators 'must now act with far greater urgency'. No timetable for any changes has been published, so for now it is still up to customers to ask for help themselves.

What you can do now

Start with your water company and your broadband or phone provider. Ask them directly whether they offer a social tariff, and have details of your benefits to hand, as you will usually need to show proof. The BBC says this does not take very long. Ofcom's list of broadband and phone social tariffs and the CCW's list of water schemes show what each company offers.

If you are not sure whether you get a qualifying benefit, or you think you may be missing out on one such as pension credit, a free and anonymous benefits calculator or a local benefits adviser can help you check. For gas and electricity, contact your supplier as soon as you start to struggle. Energy UK says companies can often only help once you tell them you cannot pay, and it publishes a list of support schemes.

If bills are already piling up, free debt charities such as Citizens Advice can give independent advice. Be wary of fraudsters sending texts, emails or fake websites that claim to offer rebates or discounts. Never reply to messages you did not ask for, and only contact your provider through its official channels.

Your questions answered

Will I pay a fee to switch to a broadband social tariff?

Not if your provider is on Ofcom's list and you are eligible. The BBC says you can switch free of charge and it will not cost you to leave your existing contract. The Mirror also reports that Ofcom lets qualifying customers move without exit fees.

Can I get a social tariff on my gas and electricity?

No. There is currently no social tariff for household energy, despite pressure from Ofgem among others. Instead, suppliers run hardship funds and support schemes, but Energy UK says you generally need to contact your supplier before your debts spiral.

Who pays for the cheaper bills?

The BBC reports that the lower cost of social tariffs is often covered by higher bills for everyone else. The size of the discount varies between suppliers, and the reports do not give a figure for each company.