WIREDGOV

Citizens Advice has responded to today’s Competition and Markets Authority remedies - announced as part of its investigation into the energy market.

The consumer champion has backed the introduction of a transitional price control for prepayment meter customers - following its Fair Play for Pre Pay campaign, which highlighted the gap between the prices, choice of tariffs and service offered to prepay users.

Citizens Advice research released this week shows customers on the cheapest PPM dual fuel pay on average £235 more per year than customers on the cheapest dual fuel direct debit.

Gillian Guy, Chief Executive of Citizens Advice, said:

“The UK energy market doesn’t work for all consumers.

“Prepayment meter customers get a particularly shoddy deal - it is more expensive, inconvenient to top up and consumers are usually excluded from the cheapest energy deals.

“It is good the CMA has acknowledged prepay customers need better protection and a price control is a very positive step for the millions of households who use this payment method and often get a raw deal.

“It’s also vital support is given to the poorest households using credit meters.”

Citizens Advice factfile on prepayment meters:

• 16 per cent of GB energy customers use prepayment meters – approximately 10.8 million people live in homes that pay for their energy this way.

• Only a third of prepayment customers have ever switched supplier.

• PPM users are far less likely to receive bills from their supplier, compared to users of other payment methods.

• The number of prepayment meter users is increasing – on average 2,451 meters are installed every working day.

• Experience from other markets (e.g. mobile telecommunications), as well as customer research, suggests it is not unrealistic to expect up to one third of consumers will be on some form of prepayment offer when smart meters are rolled out.

• In 2014, around 60% of prepayment meters were installed due to debt.

• Only 10% of gas PPM users and 7% of electricity PPM users are currently repaying a debt.

Notes to editors

1. The Citizens Advice service comprises a network of local Citizens Advice, 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.
2. 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.
3. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
4. 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.
5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.