Affordability of energy and prepayment meters: Supporting vulnerable families

Citizens Advice estimate that 3.2 million people across Britain ran out of credit on their prepayment meter last year, the equivalent of one every 10 seconds. This means that families and households who fall into low affordability categories and were forced onto prepayment meters are left in the cold and dark as they cannot afford to top-up their meters regularly. Subsequently, charities and MPs have called for urgent action in banning the practice of forcing customers onto prepayment meters. Citizens Advice says that more people sought help with energy last year than in the past 10 years combined as the rate of switching from other payment methods rose from 380,000 in 2021 to 600,000 in 2022. Commenting on what is common practice at most energy providers in the UK, Mark Sait, CEO & founder of the leading sustainability and money-saving consultancy platform, SaveMoneyCutCarbon, discusses the affordability of energy and how government bodies should support vulnerable families struggling to pay for their energy bills.

“Energy providers are using the energy crisis as a tactical tool to move more and more of the most vulnerable and struggling households onto prepayment meters – it is a disturbing practice that benefits only one party – the providers. This improves the profits and cash collections of these companies as it drives more energy usage, counteracting what we ought to be doing which is to keep energy demand down.

“More worryingly, I have noticed a big drive towards encouraging the installation of smart meters because the beauty of a smart meter, from an energy company perspective, is that they can literally just flick a switch and place a household onto a prepayment meter, and many times without the consumer even knowing. This once again benefits the provider by giving them control. As a result, at least two million people are left disconnected at least once a month for more than 24 hours. I think it is now time to look at different ways of taking matters into our own hands.

“In my view, to solve this problem for the most vulnerable people, the government should be taking these people on prepayment meters away from the energy companies and instead be moved onto to a non-profit organisation that potentially could buy all of the energy for 4 million people in the UK from green sources. They should remove that profit element and deliver the credit directly onto the meter of the people most in need.

“Energy companies are not going to teach you how to use less energy, otherwise, they lose out on money. One of the ways we are helping customers is through our free Home App which helps people identify what is using the most energy in their home and suggest more efficient alternatives that change the home’s carbon output. This should be the priority for governments and organisations looking to help lower-earning families struggling with their bills – this will ensure the money on their meter will go further and last longer.”

A household using a typical amount of gas and electricity will pay £3,000 annually, up from £2,500, as the Energy Price Guarantee rises. The scheme will run for 12 months from April. It is estimated that without further government intervention, a typical annual energy bill could be £3,702 from April, according to analysts Cornwall Insight, plunging a predicted two-thirds of families into energy debt.

A landmark study from SaveMoneyCutCarbon found that energy efficiency is already high on the list of British homeowner’s priorities. These findings are indicative of greener behaviours being engrained as a more conscious decision for UK consumers aided by plans outlined today:

51% agree that they want to swap all traditional light bulbs in their house for LED by the end of the year in order to reduce their energy bill
48% agree that energy efficiency is the first thing they look for when purchasing a new item for their home
45% agree the next house they buy will be energy efficient
12% agree that they have installed an electric charging point at their home ahead of purchasing an EV