Scots who claim Universal Credit could see the value of their benefits wiped out if they use prepayment meters to heat their homes, a charity has warned.
Citizens Advice Scotland (CAS) said the soaring cost of energy was being hardest felt by the 470,000 households who pay for their gas and electricity in advance.
Estimates from the Fuel Bank Foundation suggest monthly payments for prepayment customers could hit £595 per month - more than the standard allowance of Universal Credit across a range of claimant types.
For a single person under 25, the standard allowance of Universal Credit is £265.31 per month, less than half of a forecast monthly pay as you go energy bill.
For a couple over 25 the standard allowance is £527.72, still less than the likely monthly costs.
Pre-payment customers are more likely to be living in fuel poverty than direct debit customers.
CAS is now warning people will ration their energy use this winter due to costs or even self-disconnect, cutting themselves off from their energy supply because they can’t afford to pay.
The charity’s Extra Help Unit, a specialist team of energy caseworkers, has already seen self-disconnection cases increase by almost 600 per cent over the last year.
Derek Mitchell, CAS chief executive, said: " People will freeze or starve this winter without urgent and radical government action on the cost of living. Costs are set to soar and the safety net isn’t strong enough to support people.
"For those on prepayment meters, their standard payment of Universal Credit could be entirely wiped out by their monthly energy costs.
"For claimants under 25, their standard allowance won’t even cover their monthly bills. This isn’t sustainable for people, and makes the decision to cut Universal Credit by £20 per week a year ago seem even more short sighted and counterproductive.
"We’ve already seen energy rationing and self-disconnection increase and there’s a real risk of this continuing into the winter. Policymakers can't waste time here – this is building up to a tsunami of poverty, debt and destitution.
"If people are struggling with the cost of living, there may be additional benefits or grants they are entitled to. The best thing you can do is seek advice.
"The CAB network offers free, impartial and confidential advice which is open to everyone regardless of background or circumstance."
Shadow chancellor Rachel Reeves said last week that Labour would end the “unjustifiable” practice that can result in people with energy prepayment meters being charged more than those who pay by direct debit.
Bringing prepayment energy prices into line with those for direct debit customers and would provide relief to four million households facing soaring energy bills, the party claimed.
