1.62 million prepayment energy consumers cuts off each year

30 Medi 2014

Citizens Advice launches ‘Fair play for prepay’ campaign

One in every six prepayment meter customers has cut off their energy supply because of high costs, difficulty topping up or faulty meters, finds Citizens Advice.

New research from the national charity finds half of prepayment meter customers who disconnected from their supply last year are seriously concerned about being able to afford to top up their gas or electricity meter.

The new report from Citizens Advice and Citizens Advice Scotland, Topping-up or dropping out, reveals some of the challenges and stark choices pay-as-you-go customers face.

In many cases, people are left without power as they run out of credit or aren’t able to get to a shop to top up. A lack of innovative options which help consumers to pay easily in other areas, such as mobile phone top-ups, can make it more difficult for prepayment consumers to keep their meters topped up.

Citizens Advice also finds some people are self-disconnecting – going without gas or electricity – because of rising prices and unstable incomes.

Reduced working hours, loss of employment, illness or a change in benefits can lead to erratic changes in people’s finances. This means there is no longer enough money to cover day to day costs. In some cases people are forced to spend less on heating and lighting their home.

Today marks the start of the energy industry’s moratorium on disconnections. From 1 October to 31 March 2015 suppliers are not allowed to cut off the gas and electricity supplies of homes where the elderly, sick or disabled or households with young children are living. However, as today’s report highlights, this does not offer any protection for pay-as-you-go energy customers.

Analysis of energy firms’ approaches to self-disconnection shows that most firms only contact vulnerable consumers a month after they last topped up. It can be up to three months for consumers who are not believed to be vulnerable.

The report also finds:

Children live in half of the households that have prepayment meters.
People who are on prepayment meters and self-disconnect are on the lowest incomes.
Keeping the meter topped up is a major concern for more than half of people who have disconnected in the last year, up by six per cent since 2010.
Disconnections can be as little as an hour to as long as several months.
43% of bureaux advisers referred cut-off prepayment consumers to a foodbank.

Gillian Guy, Chief Executive of Citizens Advice, said

“Going without gas or electricity is a grave necessity not a choice. The budgets of many prepayment meter users are stretched so thin that not topping up their energy meters for a few days, or even weeks, is the only way to get by.

“It is very concerning that, as temperatures start to drop and the nights draw in, some prepayment consumers will be living in cold, dark homes because they can’t afford to put money on their meters. Energy companies are doing the right thing by putting a freeze on disconnections for vulnerable households but industry, Government and the regulator need to look at how this can be extended to prepayment consumers too.

“Self-disconnection is just the tip of the iceberg when it comes to problems faced by prepayment consumers. Higher costs, a small or non-existent choice of tariffs and inconvenient ways of topping up are some of the extra challenges faced by pay-as-you-go energy consumers. That’s why we’ve launched the Fair play for prepay campaign to help get a better deal for these households.

“Energy customers can get advice by calling our consumer helpline on 03454 04 05 06, go online at www.adviceguide.org.uk or visit their local Citizens Advice Bureau.

”

Margaret Lynch, CEO of Citizens Advice Scotland said:

"It's astonishing that in one of the richest countries on earth, people still have to choose between heating and eating. This report shows the shameful hardship suffered by millions of people who have little choice when it comes to how they heat their home or how they pay for it. Together with Citizens Advice, we are calling on the energy industry to hand power to consumers by giving them real choice over how they pay and proper control over what they use."

The Fair play for prepay campaign is calling for:

better customer service and support with easier top ups;
a fair choice of tariffs in line with other payment methods;
a smarter prepay offer that works for consumers.

-ends-

Notes to editors:

The ‘Topping up or dropping out’ report is informed by an omnibus survey of 14,226 prepayment customers which was conducted in 2013/14 and a survey of 96 bureau advisers in 2013/14 and an online survey of 441 people who have prepayment meters which was hosted on Citizens Advice adviceguide website.
Consumer Futures’, now part of Citizens Advice, research found that 15 per cent of respondents with a PPM had disconnected in the last year. Around 16% of Great British energy customers use PPMs – we estimate 10.8 million people in GB live in homes that pay for their energy via a PPM (Based on three-quarters estimate of customers with both gas & electricity PPM (Consumer Futures 2013 self-disconnection omnibus), total PPM numbers (7.6m Ofgem social obligations 2013) and ONS average household size of 2.29
Between October and March energy suppliers are not allowed to disconnect any households comprising of pensioners, chronically sick or disabled adults. The larger suppliers have voluntarily committed to avoid disconnecting any households with children under the age of five.
The 2013/2014 survey was conducted by TNS Capi omnibus. Fieldwork ran from 4 December 2013 to 21 January 2014. The total sample was 14,226 adults aged 16 years+. Results were weighted to be nationally representative of the Great British population
CAB clients and advisers were surveyed by Illuminas between November to January 2013-14. In total we received 441 complete responses from CAB clients and 96 complete responses from advisers.
Consumer Focus previously published a report on self disconnection in 2010. The report found that up 1.4 million households had self disconnected from their prepayment meter. http://www.consumerfocus.org.uk/publications/cutting-back-cutting-down-cutting-off
This year the Citizens Advice service celebrates its 75th anniversary. We’ve planned a year of activity running from January to December 2014. Contact the press office on 03000 231 080, or via email at press.office@citizensadvice.org.uk, to find out more.
The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
To find your local bureau in England and Wales, visit www.citizensadvice.org.uk. You can also get advice online at www.adviceguide.org.uk
You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.6 million problems from April 2012 to March 2013. For full 2012/2013 service statistics see our quarterly publication Advice trends
Citizens Advice service staff are supported by more than 22,000 trained volunteers, working at over 3,000 service outlets across England and Wales