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Policy and Government

The poor pay more: prepayment meters and self-disconnection

calendar08 December 2015

12 months on from our initial report we have produced a short update. Please find more information below.

10.8 million people live in households that pay for their energy by prepayment meter (PPM). CAP’s latest research highlights the hardship they face and the widespread self-disconnection taking place. As the number of PPM installations continues to rise, it is imperative that more is done to protect these consumers

That’s why CAP is making the following recommendations:

  • The poor should not pay more
  • Monitor and require action on self-disconnection
  • Raise awareness about standing charges
  • Prioritise PPM users in smart meter roll out

That’s why CAP is making the following recommendations:

Read the full report here

Two fifths of CAP clients pay for their energy by PPM. These clients pay more for their energy because they are unable to access the same tariffs at Direct Debit customers. The poor pay more research shows that PPM users include more vulnerable consumers, who are less likely to be able to contend with the additional challenges that come with paying for energy by PPM.

Surveying 1,600 people working with CAP to resolve their financial difficulty, The poor pay more finds nearly six in ten PPM users limited their energy use to some extent over winter. Half of this group did so severely, using their heating for less than two hours a day a week per month, less than four hours a few days per month or not using their heating at all. This is not a small problem; we estimate that in the UK there are 266,000 households in arrears on their PPM who are limiting their energy use, with 43,000 going without any heating over winter.

Alongside self-disconnection, PPM users are also turning to other coping strategies. The stark reality is that PPM users are also turning to sources of high-cost credit twice as often as non-PPM users and 36% of them have considered suicide as a way out of their debt problems. Prepayment meter users are forced to make impossible choices as a greater proportion fall behind with their rent or mortgage, council tax and other household bills.

As well as the numbers, The poor pay more features real-life client stories such as Kev’s, sat at home in his dressing gown and bobble hat, Mandy’s children being bullied at school because they didn’t have enough hot water for a bath and even a CAP client whose toilet had frozen.

Read the full report here
Info graphic for client stats

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