MILLIONS of hard-up households on pre-payment meters are paying extra – and being pushed further into debt.
The nation is bracing itself for a miserable winter with bills expected to rocket to an eye-watering £4,200 on average in January next year.
HOAR speaks to the “forgotten front line” of the energy crisis
But four million customers who have prepayment meters are facing even higher bills.
Energy is paid for on a pay-as-you-go basis, using a key card or app – but it’s usually more expensive.
Hundreds of you have told us you are terrified of these rocketing bills – and some of you are worried you won’t have enough money to put food on the table.
That’s why Sun Money is demanding the Government, regulator Ofgem and suppliers to do more to support prepayment meter customers.
We are calling for a temporary ban on moving customers onto pre-payment meters this winter.
There is a ban on disconnecting direct debit customers but thousands of households have been forced onto meters as bills soar, putting them at risk of going cold this winter.
The number of people who’ve been unable to afford to top-up meters is soaring, up from 3,000 a month in February to 13,000 in July, according to Citizens Advice.
We also want firms to temporarily stop adding debt to pre-payment meters when moving customers onto them, as this eats away at the amount of money households have to heat their homes.
StepChange chief executive Phil Andrew said suppliers need to ”ramp up protections for those who are struggling”.
While End Fuel Poverty Coalition co-ordinator Simon Francis called prepayment meter customers the “forgotten front line in the energy crisis”, adding that it is “vital” HOAR’s demands are met.
Here’s why prepayment meter customers are struggling the most with the energy bills squeeze – and how to get help.
PRICEY DEALS
PREPAYMENT meters customers pay more for bills.
The price cap – which limits how much firms can charge customers for energy – for prepayment meter customers is £46 a year higher than customers on a standard variable tariff.
There are less tariffs available as well, which means less competition and choice for customers.
“Customers using prepayment meters are much more likely to self-ration their energy, putting off topping up to save money at the expense of heating and eating,” Stepchange head of policy Peter Tutton said.
If you need extra cash to help pay your bills, firstly contact your supplier and ask for help, many have hardship funds which can help those who are really struggling.
You should also contact your local council and search for grants using Turn2us.org.
You could get hundreds of pounds to put towards your bills.
SKY-HIGH CHARGES
THOUSANDS more household have been pushed onto prepayment meters as bills soar.
Suppliers often move customers onto a prepayment meter if they’ve fallen behind on bills, to help them avoid racking up bigger debts.
Firms only do it as a last resort, if a customer stops engaging with them.
Over 27,300 court warrants were approved in May this year – an increase of 24% compared to the same period last year, according to data collected by The Big Issue.
So far this year, 187,000 warrants have been dished out to energy suppliers in total.
This allows a firm to enter the home of the customer in debt, install a meter and then charge £150 for the service.
Customers who voluntarily have meters installed do not get charged a fee.
If you have a smart meter, suppliers can switch you over automatically.
“It’s wrong to push people, who’re already struggling to pay their bills, onto a prepayment meter that’ll be more expensive for them – the additional upfront cost of installation adds insult to injury,” Citizens Advice head of energy policy Gillian Cooper said.
“If you are threatened with being put on a prepayment meter, you should talk to your supplier. They may have other options to support you and could waive the £150 charge.”
Firms say it can cost them £350 to £500 to install a meter.
Ofgem said: “A prepayment meter should only be as a last resort for suppliers.” Ofgem added that it has taken steps to ban installations for vulnerable customers.
SPIRALLING DEBT
ENERGY debt is spiralling – and prepayment customers are more likely to find themselves owing cash to their supplier.
National Energy Action director of policy Peter Smith said those on prepayment meters are “much more likely to be in significant energy debt” because they are on lower incomes.
“As a result, customers are being hit hardest by the energy crisis and are most at risk of regularly going without heating or lighting in their homes this winter,” he said.
Many customers who move onto prepayment meters are in debt and firms can take money back each time a customer tops up, meaning they have less cash is spent on energy usage.
One supplier deducts as much as 70 percent from gas top-ups to clear debts, while another has a limit of £3 per week.
“It acts like a hidden tax on being in energy debt – rather than helping customers, all this practice means is people are constantly chasing their tail,” Simon said.
Energy firms usually offer emergency credit to those on prepayment meters, to avoid customers from getting disconnected and this is a useful tool for emergencies.
Energy firms should speak with a customer to arrange an affordable repayment plan, according to Ofgem rules.
Some firms will allow customers to pause debt repayments, but you need to check.
Ofgem said that customers must “step in early to help customers manage debt through repayment plans.”
CREDIT SCORE BLOW
CUSTOMERS who want to move off a pre-payment meter could have their credit score hit.
Firms such as British Gas and Scottish Power will perform a ‘hard’ credit check on a customer when they request to move off a meter.
These marks can leave a mark on your credit file. Too many marks on your file can damage your credit score.
This could make it harder to take out credit – like a loan or a mortgage – in the future.
Peter from Stepchange said: “Multiple recent credit file searches can be seen as a sign of financial instability.”
ENERGY REBATE VOUCHER MUDDLE
HOUSEHOLDS get a £400 energy rebate this winter – but if you’re on a prepayment meter then you need to look out for a voucher in the post of a text message.
Customers will need to redeem the voucher to get the free credit.
Experts are warning that millions of customers could miss out on the help.
“There’s a risk that customers miss these notifications – perhaps because they’ve changed address or phone number – while some people will also struggle to get to a shop where they can redeem their voucher,” Gillian said.
“Our advice to energy customers would be to make sure your contact details are up-to-date – your energy company should do the rest.”
WE’LL BE SITTING IN THE DARK THIS CHRISTMAS
Jo is dreading the winter when bills will rocket ever further
MUM-OF-TWO Jo Gunn is terrified of soaring energy bills and fears her family will be sitting in the dark this winter.
The 55-year-old, from Brighton, can’t work due to a painful back condition and claims benefits worth £866 a month, which barely covers rent and bills.
She lives with her daughter, Lola, 23, and her son student George, 21.
Her supplier is Eon, and her bills have gone up from £40 a month last summer to £120 this year.
She’s “dreading” the winter, when she expects to pay double this.
“If energy bills are going up again, we might have to keep the lights off and have candles by Christmas,” she said.
“I’m getting hot water bottles and blankets now so we don’t have to have the heating on this winter.
“We just have showers, we’re not having baths to save on bills.
“I’m looking at my energy app every day just to make sure there’s enough on my meter so I won’t get cut off – money is running out so quickly.”
WE’RE WORRIED WE WON’T HAVE ENOUGH FOR FOOD
Matthew is worried about having enough money to put food on the table
DISABLED dad of two Matthew Allen is petrified that his family will go hungry as energy bills rocket.
He is drastically cutting back on groceries so he has enough cash to top-up their prepayment meter. This currently costs around £300 a month – but could rise to £700.
The 35-year-old ex-tattoo artist, who suffered spine damage during an operation in 2013, says his bills are becoming “impossible” to pay as his family gets £2,000 a month in benefits – £750 of which goes on rent.
Previously, the family had always been on credit in their meter.
“We’re constantly worried about being able to afford food,” he said.
“We’ve cut out roast dinners and we go to our parents a lot for meals – even to the point where they have suggested we stop over there a couple of nights a week to save on electricity and gas.”
“It’s scary – for people always in credit like we are, I don’t understand why we should be hammered with the highest rate.”
Matthew lives with his wife Emma, 25, and two children Ella, 4 and Zakk, 6. His wife is also unable to work due to a crushed nerve in her spine.
They are making big sacrifices to build up savings ahead of higher bills this winter.
