Over 260,000 hard-up families, who have been forced into having gas prepay meters installed in their homes after falling into debt with their energy company, face paying an extra £7m in excess charges this year, according to new research.

The National Housing Federation (NHF), which represents England's housing associations, says that British Gas, Scottish and Southern Electricity (SSE) and EDF will rake in around £6.8m extra from charging additional fees to people who have been compelled to take on prepay meters.

The three energy giants are able to make customers in debt pay excess sums for their fuel, as each company continues to charge those on prepay meters a premium of up to £39 a year more for their gas compared to those paying by quarterly bill.


The NHF fears the practice of charging excess fees to those in debt could plunge thousands of families further into financial trouble, and has called on the three companies to scrap their controversial prepay tariffs. E.on, npower and Scottish Power have already removed the prepay premium following intense pressure from ministers and campaign groups.

Nearly 400,0000 homes in the UK currently have gas prepay meters installed in their homes to pay off debts to their energy companies.

An estimated 261,000 of those are believed to be customers of British Gas, SSE and EDF, who penalise those in debt by forcing them onto their prepay meter tariffs, which attract easily the highest rates in the market for gas.

Families forced onto meters by their energy companies also miss out on the opportunity of switching to a cheaper supplier until their debts are paid off in full.

The big six energy companies have all scrapped their prepay tariffs for electricity but British Gas, SSE and Scottish Power still charge a premium for those using gas prepay meters. British Gas charge £39 more, SSE £30 and EDF £9.

(CD/JM)