Debts Forcing Thousands to Use Pre-pay Energy Meters

May 27, 2015

Struggles with debt have seen thousands of households around the UK forced to install pre-pay energy meters in their homes in recent years, it has emerged.
While most energy consumers are able to pay for supplies after they’ve used them, a growing number are effectively being forced to pay upfront for their gas and electricity supplies.

In fact, figures obtained by BBC Radio 5 Live through freedom of information requests show that more than half a million prepayment energy meters have been forcibly installed throughout the UK over the past six years.

Some households prefer to pay for their energy in advance and volunteer to have pre-pay meters installed but many are apparently having the meters forced upon them after finding themselves in arrears to their energy suppliers.

Worryingly though for consumers who find themselves indebted to energy companies, the use of pre-pay meters can lead to overall increases in the amounts being paid annually for gas and electricity supplies.

“Prepay customers have been getting a raw deal for too long,” said Gillian Guy, chief executive of Citizens Advice. “They face a limited number of tariffs and pay on average £80 more a year on their energy bills than direct debit customers.”

The energy industry regulator responded to the revelations that some 97,000 pre-pay energy meters were installed in England, Wales and Scotland in 2014 by saying it is working to “improve the experience of prepayment customers”.

“We want to make it easier for prepayment customers to switch supplier as this could help them better manage their bills,” Ofgem said in a statement.

Ofgem also explained that energy suppliers are obliged to carry out “checks for vulnerability” when seeking a warrant that legally allows them to forcibly install pre-pay meters in their customers’ homes.

“If for example the customer relies on energy for medical reasons, or has mobility problems that limit their ability to access the prepayment meter or top up the meter, the supplier is not allowed to install a prepayment meter,” Ofgem said.

According to the BBC’s figures, the installation of pre-pay energy meters peaked in 2013 when roughly 111,000 were added across England, Scotland and Wales.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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