The prepayment meter premium has been scrapped.
Previously, customers using prepayment meters faced higher costs than direct debit users.
Suppliers incurred additional expenses in managing prepayment meter accounts, including payment collection and voucher distribution, which were passed on to consumers.
By removing the prepayment meter premium, households can expect to save an average of £21 annually, offering some relief, especially to low income individuals.
The government’s decision to eliminate the unfair charge coincides with the implementation of the latest price cap by Ofgem.
The new energy price cap will reduce the average annual energy bill from £2,500 under the Energy Price Guarantee to approximately £2,074.
As a result, households can anticipate an average saving of £426, equivalent to a 17% reduction in energy bills.