UK energy debt crisis: Over £1bn owed on prepayment meters

Prepayment meter debt crisis has tripled since 2019, according to a report

People using prepayment meters (PPMs) for their energy face a growing debt problem.

That’s according to Ofgem data, obtained by campaign group 38 Degrees, showing £1,026,223,558 in debt on such meters in the first quarter of 2023.

Energy debt repayments are deducted directly from PPM credits, potentially leading to disconnections for some customers.

The figures reveal that the PPM debt has more than tripled from £328 million in 2019.

According to the report, the PPM debt now accounts for almost half of the total £2.25 billion UK energy debt, up from 27% in 2019.

An Ofgem spokesperson told Energy Live News: “We know that as part of wider cost of living challenges there will be households that are struggling with their energy bills, which is why the price cap was introduced to ensure customers pay a fair price for their energy.

“Using the levers available to us, we are strengthening protections and support for struggling and vulnerable consumers, reducing the costs faced by PPM customers from 1st October by £42 per year and ensuring that suppliers are able to offer extra credit to PPM customers who are unable to top up and risk going off supply.

“We’ve made clear to suppliers they should be providing a good level of customer service, which includes proactively identifying those at risk, particularly vulnerable customers and then helping with things like tailored payment plans or signposting them to additional support.

“We’ve just closed on a consultation on new rules to strengthen those protections. If suppliers are not offering a good service to their customers then we’ve shown we will take action, issuing multi-million pound fines if needed.

“On PPM, we put a new code of conduct in place which suppliers have signed up to and suspended all forced installations until suppliers meet a series of conditions. We have also consulted on making the code of conduct part of suppliers’ mandatory license conditions and longer term are working to change things so customers on PPM are not paying more than those on direct debits.”

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