Energy meter customers pay £255 more

Homes using prepay energy meters pay on average £255 for gas and electricity than those paying by online direct debit.

Consumer watchdog energywatch is now calling for the end of the discrimination against prepayment meters (PPM) customers – especially as meter customers tend to be the poorest households.

Adam Scorer, at energywatch, said: "It is simply scandalous that some of the poorest people in society are being forced to pay 31 per cent more for their energy than those who have the means to access cheaper deals.

"This discrimination by energy companies is hurting those that most need help and is seriously undermining the fight against fuel poverty."

Figures from the government, regulator Ofgem and the energy industry reveal over 1,000 PPMs are installed everyday in the UK – as energy providers try to recover energy debts and a third of lone parents, people with long-term illness or disability, the unemployed have meters.

However, a quarter of those on meters did not know they were not on the cheapest payment methods.

PPM customers are also the least likely to switch providers, despite the fact Ofgem calculates they could save an average of £100 a year by doing so.

Energy firms justify the higher charges because of the increased costs of running meters and the card or key payment systems – but Ofgem is currently investigating whether the premium paid truly reflects the increased costs.

Energywatch estimates the cost of running the meters stands at £243 million a year – but the higher bills see prepayment customers paying a total of £644 million over standard customers.

Price comparison site uSwitch.com estimates 4.5 million people are now in fuel poverty as the average annual energy bill hits £1,026.

But under 400,000 customers are on energy providers social tariffs.

Energywatch is calling for the government and Ofgem to require companies to offer meaningful social tariffs to their poorest customers and cut the use of PPMs.