Citizen's Advice call for ban on moving people to prepayment meters this winter
The advice service says no one should be "punished" if they can't afford rising energy bills
Citizen's Advice is calling on the government to ban energy companies from moving customers to prepayment meters this winter as up to 13 million people struggle to pay their energy bills this winter.
Friday's 80% energy price cap rise has seen the average bill pushed up to around £300 a month.
The advice service says it believes that's unaffordable for around one in four families, and if January's rise is as big as expected, it could mean one in three households will struggle to meet their new payments.
They say no one should be "punished" for not meeting these new costs, and powers to move someone onto a prepayment meter should be removed while the crisis continues.
Prepayment meters often cost more
Principal Policy Manager at Citizen's advice Rachel Beddow told Northsound 1: "We would like the government to ban moving people to prepayment meters as a result of them struggling because it's not the right way to help people.
"We don't want to see people punished for a situation that is outside of their control. Energy companies have a clear obligation to support people who are struggling and one of the ways to do that is by not pushing people on to prepayment meters.
"(Prepayment customers) are going to be bearing the brunt. They pay more, they pay upfront, so they're going to be hit with the costs quicker.
"We are heading into a desperate situation. We're already seeing people making those choices between running a bath or cooking food. We want to see (government) measures put in place as soon as possible so people have got reassurance they know they're going to have support to cope."
Prepayment meters
While some people choose to have a pre-payment meter to help them budget and monitor their usage, it can also be forced on a household if other means of securing payment have not been successful.
Current guidance means that will only happen if the supplier has exhausted all other options of securing payments.
Prepayment meters can cost the consumer more to run because of the infrastructure needed to support it, and you have to pay upfront for the energy you're going to use rather than get it on credit and pay back on a direct debit or bill.
PPM users can expect costs to rise as the days get darker and colder and they use more electricity and heating.
Find out what support your PPM supplier should offer if you're struggling
But suppliers are concerned a ban on their roll out could mean more unpaid debt in the system, which would have to be recouped elsewhere.
Energy costs "making life difficult"
An Energy UK spokesperson told us: “Suppliers are required to exhaust all other options, including contacting the customer a number of times to offer repayment plans, before they can move customers onto prepayment meters.
"Customers have in the past found prepayment meters an effective way of helping them budget and monitor their energy usage.
"However we know record energy costs are making life very difficult for prepayment customers right now, which is why it is vital for the Government to step in and offer more support with bills set to increase further.”
Find out what wider energy support might be available to you on the Energy UK website
UK cost of living crisis
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to £3,549 for an average home in October but a price freeze from the government restricted the typical bill to £2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits £100
On 9th June 2022, the average cost of filling up a car with petrol hit £100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.