Pre-payment customers ‘overpaying nearly £390m a year on energy bills’

That’s the suggestion from new research published by comparethemarket.com, which reveals 4.1 million customers are each paying on average £94 more a year for their energy than they would pay on a standard credit meter

The Big Zero report

Pre-payment energy customers are overpaying on their energy bills by nearly £390 million a year.

That’s the suggestion from new research published by comparethemarket.com, which reveals 4.1 million customers are each paying on average £94 more a year for their energy than they would pay on a standard credit meter.

Prepayment tariffs can be either fixed or variable, much like standard energy deals – the newly-published research finds the cost differences between tariff types are significant, 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, a fixed-term prepayment meter tariff is on average £33 more expensive a year than a non-prepayment meter fixed tariff,

The annual difference in price between the average prepayment customer on a standard variable tariff versus a customer with a standard credit meter on a fixed term 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 283 tariffs available for non-prepayment customers but just four fixed prepayment meter tariffs for customers to switch to, and only 45 variable prepayment tariffs available compared to 91 for customer on a credit-based standard variable tariff.

Peter Earl, Head of Energy at comparethemarket.com, 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.”

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