Households on prepayment meters within the UK might see their energy bills value as much as a 3rd of their household income this winter, new analysis has warned.
Essentially the most weak households might be worst affected, the findings from the Decision Basis present, as increased costs and colder weather have a disproportionate influence.
The UK’s 4 million households on a prepayment meters might want to spend an estimated 30 per cent of their revenue or extra on power payments, after housing prices, throughout December, January and February.
These meters are usually concentrated in low-income households within the UK. They’re mostly put in in rented properties, with customers required to pay for power as they go and earlier than it’s used.
Vitality payments have begun rising once more in 2024 (PA)
Folks in these households “stay ignored” says the report, including that “as [prepayment meters] are concentrated amongst poorer households, this drain on household funds is unsustainable, resulting in households sitting in chilly, darkish properties.”
Researchers additionally level out that over half of the households on these meters are in debt to their power suppliers which, as this debt is paid when meters are topped up, is including to the battle to maintain heat.
Earlier evaluation from Citizen’s Recommendation has discovered that 1.7 million individuals in Britain ran out of credit score on their prepayment meter final yr, whereas 800,000 went no less than 24 hours with out electrical energy or fuel totally.
Vitality payments for all households might be growing from January, as Ofgem’s energy price cap rises by 1.2 per cent to £1,738. This follows a large 10 per cent in October, and is predicted to rise once more in April.
Jonathan Marshall, the principal economist on the Decision Basis, mentioned: “For a lot of households, the current power disaster is an episode they’re eager to neglect. However for the million households on prepayment meters this winter, it’ll really feel just like the disaster by no means ended.
“Persistently excessive power prices and heavy use throughout the chilly winter months imply that households on prepayment meters are set to spend virtually a 3rd of their household budgets on power throughout the subsequent three months. These excessive prices can squeeze out different vital spending and improve the danger of individuals rationing their power use in a manner that may hurt their well being.”
A spokesperson for the Division for Vitality Safety and Internet Zero mentioned: “We’re doing every part we are able to to help weak households this winter – together with via the £150 heat dwelling low cost anticipated to help 3 million eligible households, whereas round 1.3 million households in England and Wales will proceed to obtain as much as £300 in winter gas funds.
“In November, Vitality UK, in collaboration with the federal government, printed a winter 2024 dedication which guarantees £500m of trade help to invoice payers this winter. This consists of credit score on payments or prepayment meters, and enhanced debt write-off schemes and hardship funds.
“We welcome the steps already taken by Ofgem to guard prepayment meter prospects, and we’ll proceed to work carefully with them to make sure that suppliers solely set up involuntary prepayment meters as a final resort – making certain shoppers can afford to pay for his or her power.”
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