Around four million households using prepayment meters (PPMs) will spend over 30 per cent of their income on energy costs in December, January and February, a report by the Resolution Foundation found.
Rising energy costs will be accompanied by cuts to the winter fuel allowance for about 10 million pensioners this winter after Chancellor Rachel Reeves announced that the payment will be means-tested, meaning only those on pension credit or other income-related benefits will be eligible.
While Age UK estimated that around 600,000 older people used PPMs in 2023, this figure is likely to have increased as a result of rising energy costs, according to Dennis Reed, director of the Silver Choices charity supporting the elderly.
“The cruel decision to scrap winter fuel payments for most older people will accentuate this trend.
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Read More“Ministers refuse to meet us to discuss solutions to this winter energy crisis, citing ‘diary commitments’, but what is more important than poor people potentially dying of cold?”
However, a surge in claims for pension credit since the winter fuel payment cut was announced may mean that savings will be significantly lower than the Treasury had anticipated.
The spokesperson added that the Government is working closely with Ofgem to ensure that suppliers “only install involuntary prepayment meters as a last resort – ensuring consumers can afford to pay for their energy”.
More than 50 per cent domestic customers are debt to their energy supplying using a PPM
The Resolution Foundation said that these debt costs are recouped when meters are topped up, leaving less credit available for much-needed energy.
The prepayment price cap level will rise from £1,669 to £1,690 per year.
“But for the four million households on prepayment meters this winter, it will feel like the crisis never ended.
“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.
Matthew McGregor, chief executive at the 38 Degrees campaign group, said: “Another day, another shocking headline about energy bills this winter – and that’s before the higher price cap kicks in on 1 January.
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Read MoreAdam Scorer, Chief executive at fuel poverty charity National Energy Action, told The i Paper: “Prepayment meter customers are most vulnerable during winter. Having to pay the costs of energy as you use it in wintertime is punishing and beyond the means of millions.
“We’re calling for a help to repay scheme so that those most in need can get out of impossible levels of energy debt. We are also campaigning for a social tariff so those on the lowest income wouldn’t accumulate such devastating debt in the first place.”
“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.”
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