Citizens Advice have flagged the issues pre-pay energy users face, arguing that the service is second-rate compared to the mainstream market of credit energy users.
Their paper, ‘Topping Up or Dropping Out’, has heavily suggested that the pre-pay market, which is predominantly made up of low income and vulnerable households, are forced to settle for second-rate services. As a consequence, the market may well be falling short in appropriately tackling fuel poverty.
Within the CAB paper, Ofgem state that 16% of the electricity and 14% of the gas markets use prepayment meters, unfortunately this portion of customers are paying on average £80 more a year when compared to credit customers. This means over 4.5 million UK households are using a service that is not in-line with credit methods.
CAB cited three key areas for improvement: ‘a better price’ for pre-pay customers, ‘more control’ and ‘ease of use’. As an independent energy supplier focused solely on delivering a prepayment service, we understand the needs of this market demographic and recognise that the implementation of these key service benefits are an important step in alleviating some of the financial burden felt by over two million households living in fuel poverty.
Currently 1 in 6 customers on a prepayment tariff disconnect their services as a result of not being able to afford payments, some of whom remain disconnected for months on end. It was reported that 16% of prepayment customers had their power shut off over 2014 due to problems incurred whilst trying to top-up funds. Worse still, half of these customers had children to look after, meaning that some of the most vulnerable groups in society are subject to a disturbingly debilitating environment.
Further criticism of the pre-pay market from Citizens Advice includes concerns around the motives of energy providers installing prepayment meters, customers being penalised for opting for a prepayment tariff and the ease by which customers are able to top-up coupled with the lack of support the supplier provides thereafter. We have already met CAB’s calls to action, offering a highly competitive prepayment tariff against the Big Six, installing free, market-leading smart meters enabling their customers to top-up up quickly and conveniently online, via SMS and over the phone - remotely, wherever and whenever suits them. Our ‘Smart Energy’ service also includes Emergency and Friendly credit facilities to ensure our customers do not lose power during evenings, weekends and bank holidays.
Bill Bullen (Utilita Energy Managing Director & Founder), explains our take on the situation:
“The important difference with prepayment smart meters is that you know exactly how much credit you have with your supplier. Over 80% of our customers have smart meters installed and are increasingly recognising the benefits and convenience prepayment smart meters have to offer.”
Considering there are over 4.5 million households in the UK on a prepayment supply, the energy market is still dominated by the ‘Big Six’. Utilita are pleased to be offering a service tailored to the needs of prepayment customers. The company believes in the future of prepayment and see it is a real solution in tackling fuel poverty.
Reference: Topping up or Dropping out - published October 2015 written by Dhara Vyas, part of the 'Fair Pay for Pre-Pay' campaign: http://bit.ly/1C1Ebpz
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