Prepayment meter energy crisis

OFGEM has introduced a price cap for prepay customers which came into effect on April 1

OFGEM has introduced a price cap for prepay customers which came into effect on April 1

New research from has revealed that householders with prepayment meters, often some of the most vulnerable members of society, are the least likely to switch energy provider.

A quarter of households with a prepayment energy meter have never switched supplier, compared to 19% of those who pay a monthly bill for their energy usage. Just 13% of those with a pre-payment have switched provider in the last year, compared to 22% of those who pay monthly.

Regulator OFGEM has introduced a price cap for prepay customers which came into effect on April 1, following recommendations from the Competition and Markets Authority which found the cheapest bills for prepayment customers can be between £260 and £320 more than for direct debit.

Almost one in five people with a prepayment meter didnâ??t know they could switch energy provider, because they had a prepayment meter installed, while 19% didnâ??t know if they would save any money by switching.

Almost half of those with prepayment meters donâ??t understand how their energy tariff is calculated, compared to 37% of those on a pay monthly energy tariff. People donâ??t understand that tariff units act essentially as a form of measurement, which explains how much people are paying for their power represented as pence per kilowatt-hour.

Shockingly, a fifth of people donâ??t think or donâ??t know the energy tariff they are on impacts the price they pay for electricity. Almost two thirds also donâ??t think or donâ??t know the region they live in will affect how much they pay for energy. Furthermore, 32% donâ??t realise their payment method impacts the price they pay.

The research also identified a worrying lack of awareness about the process of switching and time the process takes, with 15% of those with a prepayment having no understanding of how to change supplier. A further 37% said they understood some of the process but were not completely sure on how to go about it or the timescales involved.

The study found 463,410 households with prepayment meters across Britain would prefer to speak to someone face to face about the available energy switching options.

Mike Rowe, chief operations officer, at, said: â??There is an obvious need for increased support to help people with prepayment meters switch energy provider. The government should be doing everything it can to highlight how this vulnerable sector can save large amounts of money by changing provider, which is a really easy process that can be handled face to face.â?