Energy suppliers are set to force vulnerable British households to switch to expensive prepayment electricity and gas meters at a rate of 10,000 meters a month by the end of 2022, as consumers fall behind with regular payments.
Data from the energy regulator Ofgem showed the number of prepayment meters fitted in homes rising on a quarterly basis for the first time since 2019, despite government intervention aimed at shielding families from soaring wholesale gas and power prices.
Price comparison website Uswitch, which obtained the figures via a freedom of information request, predicted that if the trend continued there would be 10,000 installations a month by the end of the year.
That would take the total number of fitted meters to 7.5mn, up from 7.35mn in the last quarter of 2021. Some homes may have more than one meter.
The increase in prepayment meters is an early sign of distress in the energy market. Although a minority of households choose to pay for their energy consumption in advance, the majority are pushed into using them by suppliers if they fall behind with regular payments. Households normally pay for their energy after using it.
Fuel poverty campaigners have highlighted the risks of households “self- rationing” if they cannot afford to top up their meters.
The forecasts will add to concern that many households will struggle this winter despite the government’s pledge to limit typical household energy bills to £2,500 a year until April by restricting the price per unit of electricity or gas suppliers can charge. But the cap is still almost double what the average household paid last winter.
Outgoing prime minister Liz Truss originally promised the support would last two years but chancellor Jeremy Hunt last week reduced it to six months.
He said the Treasury would review the policy after April and seek to target “the most vulnerable”. The cost of the original package had been estimated at £150bn.
Richard Neudegg, Uswitch’s director of regulation, said the rise in prepayment meters suggested households were “increasingly at risk this winter”.
“Families and individuals on prepayment meters will be plunged into darkness as they self-disconnect when they can’t afford to top up,” said Neudegg, as he urged the Treasury to prioritise those households in its April review.
Households on prepayment meters have to pay more for their energy under Britain’s price cap because of the higher costs incurred by suppliers in servicing them.
Peter Smith, director of policy at the charity National Energy Action, called the forecasts “really worrying” and criticised suppliers for often defaulting “too quickly” to installing prepayment meters “despite this often not being wanted by the customer”.
EnergyUK, a trade body that represents companies including Centrica, EDF Energy, ScottishPower and SSE, said “suppliers offer a range of ways to pay for energy” and that “customers may find prepayment meters an effective way to help them manage their budget and monitor their energy usage”.
