OLDER HOUSEHOLDS account for one in four of all UK households now dependent on a prepayment meter (PPM) for their energy supply – around 600,000 in total. Of these, 85 per cent – around 530,000 older households – are also living in poverty and/or are in receipt of income-related benefits, meaning they are among the poorest in society, according to new analysis by Age UK.

With PPM customers generally paying more for their energy than those who pay by direct debit, and at higher risk of running out of gas or electricity due to a lack of cash or difficulty accessing their meter or a top-up point, Age UK is extremely concerned about the impact of PPMs on older people living on low fixed incomes.

That is why the charity is calling for a ‘prepayment meter amnesty’ – to give everyone with a PPM, including these 600,000 older households, the opportunity to have it uninstalled for free.

Age UK says that in too many cases, having a PPM effectively results in disconnection by the back door, despite the energy companies being officially committed to never disconnecting pensioners from their energy through the winter months. The charity has been contacted by people using a PPM who are sitting in the cold and dark because they cannot afford to keep their energy switched on and are ‘self-disconnecting’ out of desperation.

Age UK says that Ofgem needs to get on top of the PPM market and ban the forced installation of PPMs in all circumstances. Even with recent commitments to stop the practice of forcing vulnerable households to use a PPM, Age UK is worried that this is only a temporary measure. It is seeking urgent reassurance from the Government and Ofgem that forced installations have gone for good, and will not return.

While 10.7 per cent of direct debit customers are in fuel poverty, the proportion is almost three times higher (30.6 per cent) for PPM users. PPM tariffs are generally more expensive than direct debit and their price cap is set at a higher rate. There is also a more limited range of tariff options, and most PPM users top up their meter at a local shop – presenting barriers for many older people with mobility issues, and forcing them to go out in all weathers to top up their supply.

Caroline Abrahams, Charity Director at Age UK, said :“Quite rightly, there was public outrage recently when we saw footage of vulnerable people, including pensioners, having prepayment meters forcibly installed in their homes by unscrupulous contractors employed by energy companies. What is less well known is that this disgusting practice is only on hold, which means it could start up again in the future. We think Ofgem should act quickly to ban it for good, so no older person can ever be subjected to such demeaning and frightening treatment again.

“But there are broader problems with prepayment meters too, the first being that energy typically costs more when bought this way, even though they are mainly used by people on low incomes, who can ill afford a higher price. And worse still, there’s a specific concern about older people and PPMs which we are highlighting today:  that although the energy companies are supposed never to disconnect pensioners from their energy supply over winter, if they have a prepayment meter some older people become so desperate for money that once it runs out they effectively disconnect themselves. The official policy of not disconnecting older people is in place because of the acknowledged health risks to them of becoming very cold, but you can see that if you are an older person with a prepayment meter, the extra protection that’s supposed to be there for you doesn’t really exist.   

“That’s why we at Age UK think it’s time for a ‘prepayment meter amnesty’, whereby anyone who has one can have it removed if this is their wish, at no extra cost to themselves. A regular meter would provide older people with greater protection from the risk of becoming dangerously cold by allowing the ‘no winter disconnection’ policy to be properly fulfilled, and it would usually save them much-needed money too, since their energy would typically cost them less this way.”

In the longer term the Charity is calling on the Government to introduce a ‘social tariff’, a government funded discounted energy deal that would make bills 50 per cent cheaper for disabled people, carers and those on lower incomes and in fuel poverty struggling to pay.

Age UK is urging any older person living on a low income or struggling with their bills to contact its free Advice line on 0800 169 65 65 to check they’re receiving all the financial support available. Alternatively, people can visit the Age UK website here or contact their local Age UK for information and advice.

* Source: Age UK