MORE THAN 450,000 PEOPLE could be made to pay their energy bills with a prepayment meter by the end of 2022 because they have fallen into debt, in addition to the millions of people already on them. This is according to Citizens Advice analysis of Ofgem data on the number of customers already moved to prepayment meters due to debt.
Under current rules, energy companies can push someone onto a prepayment meter when they cannot pay their bills. This means they have to ‘top up’ in advance to keep their lights and heating on. People who pay-as-they-go for their energy are at particular risk in the winter months because they cannot spread the cost across the year, like direct debit customers.
The charity’s advisers have seen people who have resorted to unplugging fridges and freezers, washing clothes by hand and skipping meals to cut back on their energy costs. This year, Citizens Advice has already supported record numbers in desperate situations because they simply cannot afford to top up.
The number of people coming to the charity because they have been forced onto a prepayment meter has also risen by 138 per cent in the last two years. It is now significantly higher than it was before the pandemic.
Citizens Advice predicts households that pay-as-they-go could spend £258 more on their energy this winter than someone paying by direct debit. With 4 million households expected to be on prepayment meters this winter, collectively these customers will spend more than £1 billion on energy compared to direct debit customers.
Energy suppliers will not disconnect customers who can not afford to pay their bills this winter when they are worried about their safety. But by pushing people onto prepayment meters, they are putting them at risk of disconnecting themselves.
Citizens Advice’s frontline insights show people who should be protected are still being forcibly moved. The charity is calling on the government to bring in a winter ban on energy suppliers shifting people onto prepayment meters and for further targeted support to help those on the lowest incomes.
Fay is one of many people Citizens Advice is supporting who cannot keep up with the costs of a prepayment meter. She lives alone and has found it difficult to find work due to a health condition. With costs rising, she is struggling to manage on her Universal Credit payment.
Fay is having to limit the gas and electricity she uses at home, because she can’t afford to top up her meter. She said: “It’s getting cold now and I have to cut right back on energy because I can’t afford to top up my meter. I’m not using gas at all and only very little electric. I can’t ask my energy supplier for any more free credit until December.
“So for now I’m turning everything off. I’ve even turned the oven off as the clock takes electric. I don’t have the internet at home or on my phone, as I can’t afford it. I rarely have money to buy food from the shop, but when I do I constantly have to make choices like can I afford bread and milk or just bread. It’s got to the stage where I’m not having hot showers, I’m just washing with water from the kettle.
“Living like this is really stressful. There are days when I just sit here and cry my eyes out and think `why am I here?’”
Dame Clare Moriarty, Chief Executive of Citizens Advice, said: “Energy companies have a duty to protect customers, but forcibly moving people in debt onto prepayment meters is disconnection by the backdoor. Even with the bill freeze in place, the cost of energy will still be at a record high. If people can’t afford to top up, they’re at real risk of the heating going off and the lights going out.
“The Government must bring in a winter ban to stop energy companies forcing people already struggling onto prepayment meters. It should also bring in targeted support to help people on the lowest incomes pay their bills.”
Commenting on the Citizen’s Advice analysis, Dan White of Disability Rights UK and the Disability Poverty Campaign Group said: “As much as the energy cap was welcomed the reality is that people who use more energy than the average will pay more. Disabled people’s energy needs are higher than most as they need to run essential equipment such as hoists, ventilators, and to charge wheelchairs.
“Energy companies must only fit pre-payment meters as a final resort and consider the situations of the people using them. There must be checks and dialogue carried out first, suppliers must ensure they’ve tried to contact the individual concerned in multiple supportive and accessible ways about any debt. No one, especially a Disabled individual should be put in this awful and avoidable situation as winter approaches.”
* Read: Out of the cold? Helping people on prepayment meters stay connected this winter here.