Pre-payment energy bills nearly £390m overpaid: Energy customers using pre-payment are overpaying energy bills by nearly £390 million a year.
comparethemarket.com finds in new research recently published, which reveals that of the 4.1 million pre-payment customers, each are paying on average £94 more a year for their energy than they would pay on a standard credit meter.
Much like standard energy deals, prepayment tariffs can be either fixed or variable – the newly-published research finds the cost differences are significant between tariff types, especially for those on lower incomes, with the 64% of prepayment customers on a standard variable tariff paying an average annual cost £1,195, £39 more than a non-prepayment meter standard variable tariff.
Similarly, compared to a non-prepayment meter fixed tariff, a fixed-term prepayment meter tariff is on average £33 more expensive a year.
The annual difference in price between the average customer with a standard credit meter on a fixed term tariff versus a prepayment customer on a standard variable tariff is £219 per year, rising to £431 per year compared against the cheapest fixed credit meter tariff on the market.
The research highlights there are currently just four fixed prepayment meter tariffs for customers to switch to, but 283 tariffs available for non-prepayment customers and only 45 variable prepayment tariffs available compared to 91 for customer on a credit-based standard variable tariff.
Head of Energy at comparethemarket.com, Peter Earl said: “It is hugely concerning that prepayment meter customers – some of whom are undoubtedly classed as vulnerable – are paying considerably more for their energy on average than those on a standard credit meter.
“According to the latest government fuel poverty statistics over two million households are living in fuel poverty. British Gas’ swift reversal of its decision to only allow top-up of its prepayment meters by a minimum of £5 earlier in the year underlines how far consumers struggling to make ends meet must make each pound go.”
Pre-payment energy bills nearly £390m overpaid