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New guidelines on enforced prepayment meters fail to protect the most vulnerable

It’s disgusting that the government is allowing companies to continue this unscrupulous practice.

By Kate Osborne

The forced installation of prepayment meters should be banned, and the discriminatory, higher charges charged to people who currently have one need to be stopped immediately.

The government’s new guidelines on prepayment meters only ban the forced installation of prepay meters for a very small group, leaving many vulnerable people at risk. Recommended by the energy regulator Ofgem, the revamped rules will end forced installations for over-85s and those with “high risk” illnesses, who may need constant energy to run medical equipment. But those with Alzheimer’s and dementia, clinical depression, learning difficulties, multiple sclerosis, older people up to 85 and those with young children will still have prepayment meters forcibly installed.

The scheme is a disgrace, allowing energy retailers to forcibly install prepayment meters once again. These meters are discriminatory and are still currently charging the most vulnerable people and those least able to pay more per unit than those paying monthly bills. Although this is due to change in July, bringing the cost of energy via prepayment meters in line with direct debits, the delay in doing so has pushed people further into poverty.

In the cost-of-living crisis, when a significant portion of society is already struggling to heat their homes, the government should ensure that private companies are not able to further exploit customers for profits. Energy giants have raked in billions in profit over the past year and its executives continue to take bonuses for themselves while those unable to pay suffer.

Even when the charges are equalised, as the Chancellor announced in the spring Budget, prepayment meters will still cut people off. Last year, one in five prepayment meter customers ran out of money and lost energy access; some spent at least 24 hours without gas or electricity, leaving them unable to turn the heating on or cook a hot meal, and ruining food in their fridges and freezers.

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Citizen Advice estimates that 600,000 people were forced to switch to prepayment meters after struggling to pay their bills last year. This figure is up from 380,000 in 2021. Charities such as Age UK are calling for every household with a prepayment meter to have the option for it to be uninstalled for free, and I strongly agree.

The End Fuel Poverty Coalition said the plans “fail to deal” with concerns over energy debt relief “for those most in need”. Despite the continuous warnings issued by charities regarding the implications of prepayment meters, the government’s actions nevertheless fall short.

[See also: Why prepayment meter users face a tougher winter]

Prepayment meters should never be enforced, and people should always have the option to have them removed. Age should not be a factor, and protections should be extended across all age groups.

The number of companies that are refusing to remove prepayment meters is increasing. Due to a change in personal circumstances, I’ve recently moved house and am now renting a property with a prepayment meter, and the energy company responsible is refusing to uninstall it. I encounter daily problems with the app not working and showing incorrect amounts, and because I spend half of the week in London in parliament, it is almost impossible to manage. At one point it showed that I owed £2,000 when I was actually £40 in credit. Of course, some people would panic at seeing this debt building up, adding to the stress that the cost-of-living crisis is already inflicting.

Currently, 10.7 per cent of direct debit customers are in fuel poverty, but the proportion of prepayment users experiencing this is almost three times higher at 30.6 per cent. Those with prepayment meters are at a higher risk of running out of gas or electricity due to lack of cash. Despite, I’m sure, being useful for a small minority who would prefer to prepay, the costs far outweigh the benefits.

A voluntary scheme, which retailers can opt in and out of, is not good enough. We need a mandatory scheme, and for this government to keep its promise and protect the most vulnerable by banning forced installations, not leaving it to unscrupulous companies’ discretion. In the longer term, they should be returned to public ownership, with people and services put before profit.

It’s disgusting that this government is allowing companies to reintroduce and continue this practice. It needs to deal with the ongoing energy crisis rather than inflict more suffering on communities. But we know this government’s callous attitude to the most vulnerable won’t change.

[See also: Rishi Sunak pledge tracker: UK inflation remains over 10 per cent]

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