Poorest Energy Customers Pay £100m In Excess Charges

The Chancellor's pledge 12 months ago to offer a 'fairer deal' to all low income families who pre-pay for their energy has failed to materialise, with new figures showing they have been charged £100 million in excess charges over the last year.

The shocking charges made to prepayment meter customers have been revealed through new research by campaign group the National Housing Federation (NHF), which represents England's housing associations.

During his Budget statement last year, Mr Alistair Darling said: "We want to see the five million customers on prepayment meters given a fairer deal. We will work with the companies to take further action on a voluntary and statutory basis - to underpin this as necessary we will legislate."

However, in the twelve months since the Chancellor's statement, the country's prepayment meter customers have paid the big energy firms an average of £8.3m in excess charges every month.


Today, many prepay customers are still being charged excess sums for their energy, paying up to £39 a year more for their gas than those who pay via quarterly bills, and up to £122 a year more for their gas and electricity than those on direct debit deals.

While E.ON, Scottish Power and Npower have dropped the prepayment meter premium, British Gas, EDF and SSE are still charging their 1.5m prepayment meter gas customers a premium. And unless ministers take urgent action these people will end up paying a further £50m in excess charges over the next twelve months.

According to research by the Federation, Britain's 5m prepay customers have an average household income of just £16,000 a year, with many coming from vulnerable backgrounds, such as single-parent families and those with disabilities.

The NHF says the Chancellor should use the first anniversary of his Budget statement to end price discrimination in the energy market once-and-for-all - especially as the Prime Minister and Energy Secretary have both also threatened tough action against the energy companies over the last year.

NHF Director Ruth Davison said: "Twelve months ago, the Chancellor quite rightly identified the prepayment meter premium as one of the worst cases of social injustice in the UK.

"He promised tough action against the fat cat energy companies - but still 1.5m prepayment meter customers are waiting for the fair deal that ministers pledged.

"Clearly, the time has come for the Government to grasp the nettle, and force the energy companies to equalise charges made to prepayment meter customers with those on quarterly bills.

"Until the Government properly regulates our energy companies, so that they are compelled to treat poor customers fairly, we will continually see vulnerable customers being ripped off."

(CD/JM)