WIREDGOV

Prepay energy customers pay an average of £226 more per year than they would on the cheapest online direct debit deals, reveals new analysis by Citizens Advice.

The national charity today releases figures comparing energy companies’ cheapest prepayment meter (PPM) tariffs with their best online direct debit deals.

It shows PPM customers pay on average 22 per cent more.

The consumer champion also provides a regional breakdown, which shows that the differences in prices are widening across the country. The charity says this highlights competition is not working for all consumers.

Citizens Advice calls on CMA to address unfairness in energy market

The figures come as the Competition and Markets Authority (CMA) is due to publish interim findings from a major energy industry investigation.

Citizens Advice says the CMA review is an ideal opportunity to tackle unfairness in the energy market and ensure the poorest and most vulnerable customers, including those on PPMs, are better served.

Research shows PPM users are more likely to be on lower incomes and analysis of figures from the regulator Ofgem last year highlighted 80 per cent of households having meters installed were already in debt.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Prepay energy consumers get a raw deal.

“Our research shows many PPM customers have to fork out hundreds of pounds more than those on online direct debit deals. This unfairness leaves some of the poorest people struggling to heat their homes and keep the lights on.

“Since the launch of our campaign some suppliers have said they will improve their PPM offer, but there is still a long way to go.

“The CMA investigation provides an opportunity to overhaul the energy industry and make it fairer - giving PPM customers a better deal is a crucial part of this.”

The Citizens Advice campaign, Fair play for prepay, prompted a recent Ofgem review of PPMs, after highlighting poor customer service, high costs, and a lack of choice for customers in the prepay market.

The charity says some suppliers have responded considerably better than others to the campaign, including a commitment from some to reduce prepay prices when they roll out smart meters.

Citizens Advice data also looks at the regional spread of prices across different tariffs and payment methods.

In every energy region, the difference between the best available fixed term direct debit deal from any supplier and the worst PPM tariff increased between December 2014 and June 2015.

While this widening is due to cheaper deals becoming available for online direct debit, it highlights the absence of any competitive new deals for PPM customers.

Notes to editors