Prepayment customers missing out on savings

Ofgem, the energy regulator, has said that customers who pay their energy bills by prepayment meter are missing out on average savings of £100 by not switching energy supplier.

Karen Darby, founder of SimplySwitch.com, the price comparison and switching service, comments: “Prepayment meters rely on antiquated technology and should be phased out over the coming years. The most vulnerable households tend to have prepayment meters and they pay a premium for their energy. In the UK, around four million households are defined as fuel poor as they spend more than 10% of their income on energy bills. It’s this type of customer, who can least afford it, that’s paying over the odds for their gas and electricity.

“We urge consumers to be proactive and ask their energy supplier to change their prepayment meter to a standard credit meter. This will not only mean lower bills, but will also leave them free to switch to a different supplier. As long as the customer isn’t more than £100 in debt, their energy supplier should be able to replace their meter for free within a couple of weeks.”

A prepayment household in Birmingham using British Gas for gas and npower for electricity would currently pay £617 a year for their gas and £436 a year for their electricity - a total of £1053.

Darby says: “By switching to a standard credit meter and paying by monthly direct debit, their energy bill would drop to £904 – a saving of £149 a year. Having a credit meter also means that the customer is free to switch suppliers. If this same household switched to the best available deal, they could net a total saving of £286.”