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Daily Mirror
Daily Mirror
Business
Emma Munbodh

1,300 homes stop topping up pre-pay meters because they can no longer afford it

Some of the lowest-earning households are giving up electricity completely because they cannot afford it, worrying figures show.

Citizens Advice said it has heard from 1,300 families who have stopped using their pre-payment meter because they cannot afford to top it up.

That compares to 162 cases in April 2021.

This practice is known as self-disconnection.

It comes after a 54% rise in the energy price cap added an average of £708 to annual bills – taking typical usage to£2,017 a year.

Around 4.5million people are on pre-payment meters, often those on the lowest incomes who prefer to pay as they go along.

Ofgem, the regulator, says the cap is higher for these customers because there are higher fixed costs associated with running a prepayment meter.

Dame Clare Moriarty, chief Executive of Citizens Advice, told The Mirror: “We’re seeing a sharp increase in people contacting us because they’re at risk of losing their energy supply because they can’t afford their meter payments.

Have you stopped using your pre-payment meter? Get in touch: mirror.money.saving@mirror.co.uk

Citizens Advice has spoken to more than 1,300 people who are going without pay-as-you-go power - known as self-disconnection (Getty Images/iStockphoto)

“This can have devastating consequences: parents with no hot water to bathe their children; families sleeping in their coats; and people with chronic illnesses who can’t keep warm.

“The warning lights could not be flashing brighter and the worst is yet to come. The government must bring in more support to help people cope with this mounting crisis.”

Chancellor Rishi Sunak will give all households a £200 energy bill loan this winter to help ease the pressure amid escalating inflation – but the support has come under scrutiny because it has to be paid back.

At the same time, the energy price cap is forecast to reach around £3,000 by this winter.

Energy suppliers have also sounded the alarm over households going without basic access to energy.

Keith Anderson, chief executive of Scottish Power, told the Business, Energy, and Industrial Strategy committee (BEIS) that it was "perverse" that prepayment customers paid more than others.

Source: Citizens Advice (Source: Citizens Advice)

Energy firm Utilita has over 800,000 customers, most of them on prepayment smart meters.

Its founder and chief executive, Bill Bullen, said April had been a "genuine shock" for household budgets and that the price rises have had an immediate impact.

Like Citizens Advice, the company has seen a rising number of customers not topping up their meters because they're running out of money.

Citizens Advice has spoken to more than 1,300 people who are going without pay-as-you-go power - known as self-disconnection (PA)

"The reality of an energy business today is that it's not a profitable business. There's no spare cash to be spending with customers, and that's the really frustrating thing," he said.

"Even in a really good year, you might dream of making a 2% or 3% margin, but that's only around £20 or £30 per customer and what we're seeing here is an increase in bills of around £1,500 a year.

"There's no way that supply companies can even begin to address this problem by themselves. It's way out of our league," he added.

Mr Bullen said the energy support scheme should have been better targeted.

"Instead of having £200 for every household, you could have had £600 for the lowest third of households," he said.

He said the company is concerned over how it will support households this winter as the spiralling situation in Ukraine continues to hit global gas prices.

"I think the shock in October is going to be huge. People don't have that extra £1,500," he said.

"Everybody's hoping this is going to be relatively short lived, but the supply and demand balance to me suggests this is something that's going to go on for years, rather than months," he said.

Chancellor Rishi Sunak is expected to deliver more support in his Autumn Budget.

A Treasury spokesman said: "We won't know yet what the size of the rise will be given the volatility of prices we are seeing now and it's right that we wait until we know how big the rise will be before we decide what the solution should be."

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