Age UK has called for pre-payment meter amnesty with research showing that over half a million older households – one in four of ALL pre-payment meter customers – are now dependent on this pricier, pay-as-you-go form of energy.
Older households account for one in four of ALL UK households now dependent on a prepayment meter (PPM) for their energy supply – around 600,000 in total. Of these, 85 per cent – around 530,000 older households – are also living in poverty and/or are in receipt of income-related benefits, meaning they are among the poorest in society, according to new analysis by Age UK. While 10.7 per cent of direct debit customers are in fuel poverty, the proportion is almost three times higher (30.6 per cent) for PPM users.
With PPM customers generally paying more for their energy than those who pay by direct debit, and at higher risk of running out of gas or electricity due to a lack of cash or difficulty accessing their meter or a top-up point, Age UK says it is extremely concerned about the impact of PPMs on older people living on low fixed incomes.
The Charity is now calling for a “prepayment meter amnesty” to give everyone with a PPM, including these 600,000 older households, the opportunity to have it uninstalled for free.
According to Age UK, in too many cases having a PPM effectively results in disconnection by the back door among older customers who are struggling financially – despite the fact that the energy companies are officially committed to never disconnecting pensioners from their energy through the winter months. The Charity has been contacted by vulnerable older people using a PPM who are sitting in the cold and the dark because they can’t afford to keep their energy switched on – and are “self-disconnecting” out of desperation.
Even with recent commitments from the energy companies to stop the practice of forcing vulnerable households to use a PPM, Age UK is worried that the current suspension is only a temporary measure. It is seeking urgent reassurance from the Government and Ofgem that forced installations have gone for good, and won’t return.
PPM tariffs are generally more expensive than direct debit, and their price cap is set at a higher rate. There is also a more limited range of tariff options, and most PPM users top up their meter at a local shop – presenting barriers for many older people with mobility issues or without a top-up point close to home, forcing them to go out in all weathers to top up their supply.
Caroline Abrahams, Charity Director at Age UK, said: “Quite rightly, there was public outrage recently when we saw footage of vulnerable people, including pensioners, having prepayment meters forcibly installed in their homes by unscrupulous contractors employed by energy companies. What is less well known is that this disgusting practice is only on hold, which means it could start up again in the future. We think Ofgem should act quickly to ban it for good, so no older person can ever be subjected to such demeaning and frightening treatment again.
“But there are broader problems with prepayment meters too, the first being that energy typically costs more when bought this way, even though they are mainly used by people on low incomes, who can ill afford a higher price.
“That’s why we at Age UK think it’s time for a ‘prepayment meter amnesty’, whereby anyone who has one can have it removed if this is their wish, at no extra cost to themselves. A regular meter would provide older people with greater protection from the risk of becoming dangerously cold by allowing the ‘no winter disconnection’ policy to be properly fulfilled, and it would usually save them much-needed money too, since their energy would typically cost them less this way.”
In the longer term the Charity is calling on the Government to introduce a “social tariff” so that vulnerable people no longer feel forced to self-disconnect or live in cold homes due to the fear of huge bills. An energy social tariff is a government funded discounted energy deal that would make bills 50 per cent cheaper for disabled people, carers and those on lower incomes and in fuel poverty struggling to pay.