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The prepayment meter 'scandal' leaving hundreds of thousands in the dark

Samantha Pierre-Joseph shows her smart meter indicating that she is on a 'Prepayment tariff', in her house in London, on December 13, 2022. - Pierre-Joseph, 40, who lives with her grown-up daughter, was recently switched to a prepay meter by her supplier. She now pays more for electricity and gas than the old direct-debit payment system to heat her house, worsening the cost-of-living crisis as prices of food and other essentials also soar. (Photo by Daniel LEAL / AFP) (Photo by DANIEL LEAL/AFP via Getty Images)
A consumer's smart meter indicating they are on a prepayment tariff. (AFP via Getty Images)

Energy secretary Grant Shapps today demanded suppliers stop forcing struggling households to switch to prepayment meters.

Shapps called for a voluntary end to the practice with many people "quite literally left in the dark" after being put on the more expensive tariffs.

The forced switches – labelled a "scandal" by the End Fuel Poverty Coalition – have affected hundreds of thousands of customers.

Here, Yahoo News UK explains why forced installations of the meters have become a key issue amid the cost of living crisis.

How many people have been forced onto prepayment meters?

The Citizens Advice charity estimated earlier this month that 600,000 people were forced onto prepayment meters by their energy companies in 2022 because they could not afford their bills.

It predicted 160,000 more people could be moved onto prepayment meters by the end of winter if no further action is taken.

Installations are made under court warrants, which Ofgem says "should be a last resort" with companies having "exhausted all other options".

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But campaigners say the switches are often made without the offer of support, and that many people then go without power as they can't afford to keep the meter topped up, something that is referred to as "self-disconnection".

Prepayment meters require regular top-ups and charge at a higher rate than standard tariffs, which means customers who are already in debt may struggle to keep up with payments – particularly after energy bills have soared due to rampant inflation.

It has prompted concerns for vulnerable people self-disconnecting and going off supply in their homes due to lack of credit over winter.

How many people have ran out of credit on their prepayment meters?

Citizens Advice said an estimated 3.2 million people across Britain ran out of credit on their meters last year because they couldn’t afford to top up – the equivalent of one every 10 seconds.

There were also more people unable to top up their meters in 2022 than in the whole of the last 10 years combined.

Furthermore, more than two million people were being disconnected at least once a month – and 19% of those cut off in the past year then spent at least 24 hours without gas or electricity, leaving them unable to turn the heating on or cook a hot meal.

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The charity said it had heard from people forced onto a prepayment meter who were unable to top up even though their medication needed to be refrigerated, and a single parent with a young baby who was left in the cold and dark for 48 hours after her supplier switched her to a meter.

It is calling for a total ban on forced installations until new protections are introduced, ensuring households can no longer be fully cut off from gas and electricity.

What is the government doing about this?

Shapps has now written to energy companies demanding an end to forced installations, while also vowing to "name and shame" the worst offenders who "jump the gun".

"I simply cannot believe that every possible alternative has been exhausted in all these cases," he said.

He told firms they should first make greater efforts to help those struggling to pay their bills, such as by offering credit or debt advice.

LONDON, UNITED KINGDOM - JANUARY 17: Secretary of State for Business, Energy and Industrial Strategy Grant Shapps arrives in Downing Street to attend the weekly cabinet meeting chaired by Prime Minister Rishi Sunak in London, United Kingdom on January 17, 2023. (Photo by Rasid Necati Aslim/Anadolu Agency via Getty Images)
Grant Shapps in Downing Street this week. (Getty Images)

He also asked suppliers to reveal the number of warrant applications they have made to forcibly enter properties to install meters.

However, Shapps is only asking the companies at this stage, with the government resisting a ban on forced fittings of meters due to concerns over a subsequent increase in bailiff action.

Citizen's Advice, while welcoming Shapps's demands, also warned of the need for stronger action if his calls aren't heeded.

Head of energy policy Gillian Cooper said: "It’s now up to suppliers to do the right thing and end this practice. If they don't, the government must step in with stronger action. It's also vital further protections are brought in for people already using prepayment meters."