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Forced prepayment meter switches should be banned say MPs

Paloma Kubiak
Written By:
Paloma Kubiak

A cross party group of MPs has called for a moratorium on new prepayment meter installations over the winter while those with medical conditions should be transferred away “as a matter of urgency”.

The All-Party Parliamentary Group for Fuel Poverty & Energy Efficiency said it is concerned about the situation facing vulnerable prepayment meter customers.

It is calling on the government to “act urgently” to issue a moratorium on new prepayment meter installations this winter, and is also urging regulator Ofgem to ensure households with medical conditions are transferred away from them “as a matter of urgency”.

The calls come after i news recently revealed it took one magistrate just a few minutes to issue nearly 500 warrants allowing energy firms to force entry into people’s home to switch them to a prepayment meter.

Meanwhile in the year to November 2022, more than 370,000 warrants were issued by magistrates in England and Wales, Ministry of Justice data revealed.

And in November 2022, Ofgem admitted it was aware of the “completely unacceptable” practice of energy firms automatically switching smart meter customers onto prepayment meter tariffs.

Prepayment meters more expensive

The problem of a switch to prepayment meter whether physical or digital is that these tariffs are more expensive as you’re paying for energy in advance rather than after use.

Analysis by comparison site Uswitch suggests PPM customers spend about £50 a year more in standing charges alone, plus there are daily fees for having the meters too.

Meanwhile, charity Citizens Advice warned PPM customers could spend £258 more on their energy bills this winter compared to standard meter users paying by direct debit.

As providers are meant to follow rules set out by Ofgem and the government when moving someone to a prepayment meter, such as where a household is in debt, concerns are mounting that many will be forced to self-disconnect as they simply can’t afford to pay for their energy.

But they will still be forced to pay daily charges even if they don’t use energy and when they come to top-up, these backdated charges will eat up all the credit.

See YourMoney.com’s Moving to an energy prepayment meter: Everything you need to know. Around four million households are on a PPM but this number is set to swell as the cost-of-living crisis continues.

Government needs ‘to provide financial support’

In a statement, the APPG for Fuel Poverty & Energy Efficiency said: “We know that households with these meters are more likely to be in fuel poverty and have often experienced high debt levels. The Government should provide financial support to consumers specifically to clear debts and bring forward additional targeted financial assistance for prepayment meter customers in the next Budget.

“The aim for Government and Ofgem should be to both reduce the number of households on prepayment meters and fix the inequalities in the market for these customers. The APPG will be working cross party to build support for a social tariff to better protect these customers from high wholesale prices as the Government has signalled it will reform protections for vulnerable energy customers from April 2024. The Government could do two things more immediately to make the prepayment meter pricing fairer – reduce the high standing charges and ensure any costs of failed suppliers are moved onto general taxation as a fairer way to recover costs.”