Pre-pay gas and electricity customers adding £769.61 million to bills

24 June 2008 / by Joy Tibbs
With living costs rising and credit conditions tightening, overpaying on energy bills should be avoided at any cost. According to moneysupermarket.com, customers using pre-payment metres could be paying way over the odds for their energy.

New figures from the comparison site show that the average pre-payment tariff costs £150 more for gas and electricity than the best value rate for other customers. Collectively, pre-payment customers could be losing out £769.61 million, according to moneysupermarket.com.

A company statement said: "Pre-payment customers should not be punished for using this type of meter. It is painfully ironic that they pay a hefty price and are charged 17 per cent more on average than those who pay by monthly direct debit.

"In the budget this year, the Government put forward proposals to treat pre-payment customers fairly. It is high time these promises are put into action. Energy providers should look to reduce prices for pre-payment customers, remove back charges completely and pledge to shield them from further anticipated price hikes this year."

The company is calling on both energy suppliers and the Government to act. "Following the price hikes this year, an estimated half a million more households have plunged into fuel poverty and without action from energy providers and the Government, it is likely that more could slip into this situation," the statement said.

"For vulnerable customers who are struggling to pay for their energy bills I advise them to speak to their supplier who may be able to offer special social tariffs or give information on swapping to a credit meter, or advice on other discounts."

Meanwhile, charities Age Concern and Help the Aged are demanding that energy companies award pensioners an emergency £50 million rebate this winter to help them cope with high winter fuel bills.

According to recent figures from the Department of Work and Pensions, the number of pensioners in poverty rose by 300,000 to a total of 2.5 million in 2006-2007 – the first increase since 1998. And this is set to rise further with estimates suggesting that energy bills will increase by 40 per cent this year, leaving the most vulnerable in serious risk of fuel poverty.

Director general of Age Concern, Gordon Lishman, said: "If the energy companies really care about their most vulnerable customers, they should join forces to maximise the help available to fuel poor pensioners this winter - excuses about competition will not wash.

"Let's be clear though, this emergency relief would not absolve the Government of responsibility for delivering the long term measures needed to tackle fuel poverty. So far, ministers have been sleepwalking through the fuel poverty crisis."

© Fair Investment Company Ltd