Almost half a million could be forced onto energy pay-as-you-go meters

Almost half a million (450,000 people) could be made to pay their energy bills with a prepayment meter by the end of 2022 because they’ve fallen into debt according to new analysis from Citizens Advice.

The charity analysed Ofgem data on the number of customers moved to prepayment meters due to their existing debt to make its predictions for this year.

Under current rules, energy companies can push someone onto a prepayment meter when they can’t pay their bills. This means they have to ‘top up’ in advance to keep the lights and heating on. People who pay-as-they-go for their energy are at particular risk in the winter months because they can’t spread the cost across the year, like direct debit customers.

The charity’s advisers have seen people who have resorted to unplugging fridges and freezers, washing clothes by hand and skipping meals to cut back on their energy costs. This year, Citizens Advice has already supported record numbers in desperate situations because they simply can’t afford to top up.

The number of people coming to the charity because they’ve been forced onto a prepayment meter has also shot up 138% in the last two years. It’s now significantly higher than it was before the pandemic.

Citizens Advice predicts households that pay-as-they-go could spend £258 more on their energy this winter than someone paying by direct debit. With 4 million households expected to be on prepayment meters this winter, collectively these customers will spend more than £1bn on energy compared to direct debit customers.

Energy suppliers won’t disconnect customers who can’t afford to pay their bills this winter, when they are worried about their safety. But by pushing people onto prepayment meters, they’re putting them at risk of disconnecting themselves.

Citizens Advice’s frontline insights show people who should be protected are still being forcibly moved. The charity is calling on the government to bring in a winter ban on energy suppliers shifting people onto prepayment meters and further targeted support to help those on the lowest incomes.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said “Energy companies have a duty to protect customers, but forcibly moving people in debt onto prepayment meters is disconnection by the backdoor.”

“Even with the bill freeze in place, the cost of energy will still be at a record high. If people can’t afford to top up, they’re at real risk of the heating going off and the lights going out.”

“The Government must bring in a winter ban to stop energy companies forcing people already struggling onto prepayment meters. It should also bring in targeted support to help people on the lowest incomes pay their bills.”