‘Unsustainable’ prepayment meters might see households spend third of earnings on vitality, consultants warn | EUROtoday

Households on prepayment meters within the UK might see their vitality payments value as much as a 3rd of their family earnings this winter, new analysis has warned.

The most weak households shall be worst affected, the findings from the Resolution Foundation present, as larger costs and colder climate have a disproportionate influence.

The UK’s 4 million households on a prepayment meters might want to spend an estimated 30 per cent of their earnings or extra on vitality payments, after housing prices, throughout December, January and February.

These meters are typically concentrated in low-income households within the UK. They are mostly put in in rented houses, with customers required to pay for vitality as they go and earlier than it’s used.

People in these households “remain overlooked” says the report, including that “as [prepayment meters] are concentrated among poorer families, this drain on family finances is unsustainable, leading to families sitting in cold, dark homes.”

Researchers additionally level out that over half of the households on these meters are in debt to their vitality suppliers which, as this debt is paid when meters are topped up, is including to the battle to maintain heat.

Previous evaluation from Citizen’s Advice has discovered that 1.7 million folks in Britain ran out of credit score on their prepayment meter final yr, whereas 800,000 went no less than 24 hours with out electrical energy or gasoline totally.

Energy payments for all households shall be growing from January, as Ofgem’s vitality worth cap rises by 1.2 per cent to £1,738. This follows a large 10 per cent in October, and is predicted to rise once more in April.

Jonathan Marshall, the principal economist on the Resolution Foundation, stated: “For many households, the recent energy crisis is an episode they’re keen to forget. But for the million households on prepayment meters this winter, it will feel like the crisis never ended.

“Persistently high energy costs and heavy use during the cold winter months mean that households on prepayment meters are set to spend almost a third of their family budgets on energy during the next three months. These high costs can squeeze out other important spending and increase the risk of people rationing their energy use in a way that can harm their health.”

A spokesperson for the Department for Energy Security and Net Zero stated: “We are doing everything we can to support vulnerable families this winter – including through the £150 warm home discount expected to support 3 million eligible households, while around 1.3 million households in England and Wales will continue to receive up to £300 in winter fuel payments.

“In November, Energy UK, in collaboration with the government, published a winter 2024 commitment which promises £500m of industry support to bill payers this winter. This includes credit on bills or prepayment meters, and enhanced debt write-off schemes and hardship funds.

“We welcome the steps already taken by Ofgem to protect prepayment meter customers, and we will continue to work closely with them to ensure that suppliers only install involuntary prepayment meters as a last resort – ensuring consumers can afford to pay for their energy.”

For the newest value of residing recommendation and help this winter, go to The Independent’s frequently up to date information