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Confusion over prepaid energy

Some of society’s most vulnerable are among those least likely to switch energy provider
Some of society’s most vulnerable are least likely to switch energy provider

New research suggests householders with prepayment meters, who are often some of the most vulnerable members of society, are the least likely to switch energy provider.

The survey, by energy comparison website, reveals a quarter of households with a prepayment energy meter have never switched supplier, compared with 19% of those who pay a monthly energy bill.

Prepay costs more

Prepayment meters work on a pay-as-you-go basis via a prepayment key or card that is slotted into the meter.

Regulator Ofgem introduced a price cap for prepay customers, which came into effect on 01 April, after the Competition and Markets Authority found the cheapest bills for prepay customers can be between £260 and £320 more than for those paying by direct debit.

The survey shows almost one in five (18%) people with a prepayment meter aren’t aware they could switch energy provider, and 19% don’t know if they would save any money by switching.

Lack of awareness

The research identified a ‘worrying lack of awareness’ about the process of switching and how long it takes.

Almost half (45%) of those with prepayment meters also don’t understand how their energy tariff is calculated, and that tariff units essentially act as a form of measurement that explains how much people are paying for their power in pence per kilowatt-hour (p/kWh).

A vulnerable sector

Shockingly a fifth (19%) of the survey respondents don’t know that the energy tariff they are on affects the price they pay for electricity, and a third (32%) don’t realise their payment method impacts the price they pay.

‘There is an obvious need for increased support to help people with prepayment meters switch energy provider. The government should be doing everything it can to highlight how this vulnerable sector can save large amounts of money by changing provider, which is a really easy process that can be handled face to face. People across the country could save millions simply by taking 15 minutes to see if there is a better power deal available.’

Chief operations officer,

The research highlights 66% of those on prepay meters do moderate their energy usage to try and save money by, for example, turning off lights and choosing eco settings on appliances.

Sadly those in this group don’t recognise they could probably save even more money simply by changing energy provider.

Click here to find out whether you could save by switching to ‘Britain’s fairest energy tariff’.

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