Many pre-pay customers are in debt to an energy provider — typically owing hundreds of pounds. Ofgem say 60% of prepayment meters are installed due to debt.
Energy providers claim that pre-pay meter charges compare favourably with standard tariffs. But this does not take account of the debt repayment charges. Typically a pre-pay energy customer may put £5.00 on a card to load onto the meter:
But then when debt charges are taken this can become just one or two hours of gas. In this example just £1.50 of gas. £1.50 of gas would typically provide a small family home only a few hours of heat.
Taking 70% of an energy payment for debt leads to fuel poverty. A much fairer system is needed so that only 50% is taken for debt in Spring and Summer— and only 25% for debt in Autumn and Winter.
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