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Prepayment meter customers facing “Winter of Disconnect”

August 26, 2022

Prepayment meter customers facing “Winter of Disconnect” Featured Image

Millions of people will be forced to live without heat, light and power in their homes this winter as the cost of topping up their prepayment energy meter becomes unaffordable, Fuel Bank Foundation has warned.

With fuel prices continuing to rise, the charity says prepayment meter users will be the hardest hit, with the cost to top up each month expected to increase to £251 from October and rising further still to £480 by December.

Energy regulator Ofgem has today announced the October price cap will be set at £3,608 for pre-paying customers, pushing up annual fuel bills for millions of households. Forecasters are also predicting further price rises in January, which could see bills reaching £5,111 per year. For the four million households in Great Britain with a prepayment meter, the majority of which are low income, this will would mean a monthly fuel costs of £713 in January 2023 alone.

Fuel Bank Foundation, which funds emergency fuel for people who can’t afford to top up their prepayment meter, says spiralling energy prices will lead to more people rationing or self-disconnecting and living without heat, light and power in their homes this winter.

The impact of further energy price increases in October and January will be catastrophic for millions of vulnerable and low-income households across the UK that are already at financial breaking point. 
Matthew Cole, Head of Fuel Bank Foundation

“In January 2022, at the peak of last winter, prepayment meter customers paid on average £183 for a month’s energy. By this Christmas the same customer will need to pay £480 for energy during December alone. A 262% increase, or in real terms, having to find an extra £297 in one month isn’t financially feasible and will inevitably lead to more people living without the essentials to survive during winter because they can’t afford to put money in their meter. It has now gone beyond a choice of whether to eat or heat, for some it’s life or death.”

Mr Cole said people who pay for energy as they use it will be hardest hit as they are more susceptible to rising energy costs.

“Unlike direct debit customers who can soften the blow of price increases by spreading their energy costs over 12 months, prepayment meter users feel the impact far more acutely as they don’t have a credit or buffer to tide them over the heating season and cold winter months when costs increase. No money means no energy.

“It’s a desperate situation for a lot of people and sadly, without further government support, it’s only going to get worse. For millions of prepayment customers, this could be a winter of disconnect.”
Matthew Cole, Head of Fuel Bank Foundation

To date, more than 650,000 people have been supported by Fuel Bank Foundation with crisis prepayment meter top ups. Following the April price cap increase, the charity saw a record number of people accessing its services, with around 1,200 people currently being helped every day.

Mr Cole said the rising energy prices are having a negative impact on the support the charity provides.

“Two years ago, a £49 fuel voucher would keep a meter topped up for up to two weeks for an average household. Now, it barely provides enough energy for four days.”

He said the government must do more to help those who are the most vulnerable and at risk of living without energy this winter.

“We are on the precipice of a national fuel crisis. The first act of the new Prime Minister needs to be to confirm that meaningful financial support to cover the rises announced today will be provided to those already struggling to pay their fuel bills, in addition to those who will be plunged into fuel poverty following the energy price cap increases.

“Support must be meaningful, i.e. cover the monthly uplift households will face, and targeted at those who need it the most, such as through a social tariff.

“Longer-term, it is essential that government addresses the amount of energy households use, since this is also a way to reduce bills. Funding should therefore be made available to better insulate homes, at pace, of some of the poorest in society so we can move beyond having to provide crisis financial support to keep homes warm.”
Matthew Cole, Head of Fuel Bank Foundation