Call to end forced installation of prepayment meters as millions run our of credit

UK government ministers are being urged to stop the forced installation of prepayment meters after research revealed that 3.2 million people ran out of credit last year leaving them without power because they couldn’t afford to top up.

Research has found that one person every 10 seconds was cut off from their energy supply last year as the cost-of-living crisis left people struggling to keep the lights on.

Households who fall behind in their energy bill payments can be pushed onto prepayment meters by their suppliers. ‌​‌‌‌​‌‌‍‌​​‌‌​‌​‍‌​​‌‌​‌​‍‌​​​‌‌​​‍‌​​‌​‌‌​‍‌​​‌‌​‌‌‍‌​​‌‌​‌​‍‌​‌‌‌​‌‌‍‌​​‌​​​​‍‌​​​‌​‌‌‍‌​​‌‌‌​​‍‌​​‌​​​​‍‌​​‌​​‌​

They need to be regularly ‘topped up’ – intended to prevent bill-payers from falling deeper into energy debt. ‌​‌‌‌​‌‌‍‌​​‌‌​‌​‍‌​​‌‌​‌​‍‌​​​‌‌​​‍‌​​‌​‌‌​‍‌​​‌‌​‌‌‍‌​​‌‌​‌​‍‌​‌‌‌​‌‌‍‌​​‌​​​​‍‌​​​‌​‌‌‍‌​​‌‌‌​​‍‌​​‌​​​​‍‌​​‌​​‌​

However, the pay-as-you-go nature of prepayment meters can push households into self-disconnecting when they can’t afford to top up. ‌​‌‌‌​‌‌‍‌​​‌‌​‌​‍‌​​‌‌​‌​‍‌​​​‌‌​​‍‌​​‌​‌‌​‍‌​​‌‌​‌‌‍‌​​‌‌​‌​‍‌​‌‌‌​‌‌‍‌​​‌​​​​‍‌​​​‌​‌‌‍‌​​‌‌‌​​‍‌​​‌​​​​‍‌​​‌​​‌​

Citizens Advice has found more than two million people are being disconnected at least once a month.

The research also showed that more than one in five (19%) prepayment meter customers cut off in the past year then spent at least 24 hours without gas or electricity, leaving them unable to turn the heating on or cook a hot meal.

Citizens Advice said it is particularly concerned about disabled people and those living with long-term health conditions.

Nearly one in five (18%) households including someone in this group, who ran out of credit last year, went on to spend two days or more without energy supply.

The energy regulator, Ofgem, has rules that mean certain groups, such as disabled people and those with long-term health conditions, should not be forced onto a prepayment meter.

However, Citizens Advice previously raised concerns to Ofgem and the UK Government that it had seen evidence of suppliers forcing people in these groups onto prepayment meters.

In October, Ofgem warned suppliers that not enough was being done to identify customers in vulnerable circumstances before installing a prepayment meter.

In the month following Ofgem’s intervention, more than a third of prepayment meter households including a disabled person or someone with a long-term health condition were cut off from their energy supply at least once. That’s more than 470,000 struggling households left in the dark.

Citizens Advice is now calling for a total ban on forced prepayment meter installations until new protections are introduced, ensuring households can no longer be fully cut off from gas and electricity.

Based on Ofgem figures, Citizens Advice estimates that 600,000 people were forced onto a prepayment meter because they couldn’t afford their energy bills in 2022.

It predicts that 160,000 more people could be moved onto a prepayment meter by the end of winter.

The charity has seen a 229% increase in the past year in the number of people coming for help who can’t afford to top up their prepayment meter.

It is estimated that there are over 27,000 homes in Wales forced onto prepayment meter because they couldn’t pay their energy bills in the last year.

Around a further 7,500 more people in Wales are predicted to be moved on to prepayment meters by the end of winter.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“All too often the people finding it hardest to pay their bills are being forced onto a prepayment meter they can’t afford to top up. This puts them at real risk of being left in cold, damp and dark homes.

“The staggering rise in the cost of living means many simply cannot afford to heat and power their homes to safe levels.

“New protections are needed to stop people being fully cut off from gas and electricity. Until then, there must be a total ban on energy companies forcing those already at breaking point onto prepayment meters. If Ofgem doesn’t act, the government must intervene.”

Alyn and Deeside MS Jack Sargeant has also called for a ban on the installation of new prepaid energy meters.

He cites evidence that customers, particularly those on lower incomes, are being driven to the higher-tariff meters.

A Deeside resident contacted Jack to share their experience of trying to switch from a prepaid meter, which requires customers to pay for their energy upfront, to a standard meter.

The resident said they were quoted £150 by their energy supplier to remove the meter.

Many customers seek to switch from prepaid meters due to their higher costs.

Jack has called for reform and a ban on the installation of new prepaid meters, stating that he is “disgusted at the scandalous charges”.

Approximately 200,000 households in Wales currently use prepaid meters for their mains gas and electricity.