The Fuel Bank Foundation is warning that millions of people will be forced to live without heat, light and power in their homes this winter due to the rising cost of topping up their prepayment energy meter. Ofgem announced last week that prepayment meter customers will pay £3,608 per year on the new price cap from October 1.
Energy prices are forecast to rise even higher in January (£5,111 for prepayment customers) and the charity says prepayment meter users will be the hardest hit. It says the cost to top up each month is expected to increase to £251 from October and £480 by December.
The Fuel Bank Foundation says these estimates will see four million households across the UK with a prepayment meter - the majority of whom are on a low income - face an energy bill of £713 in January 2023 alone.
The charity, which funds emergency fuel for people who can’t afford to top up their prepayment meter, says spiralling energy prices will lead to more people rationing or self-disconnecting.
Matthew Cole at Fuel Bank Foundation, said: “The impact of further energy price increases in October and January will be catastrophic for millions of vulnerable and low-income households across the UK that are already at financial breaking point.
“In January 2022, at the peak of last winter, prepayment meter customers paid on average £183 for a month’s energy. By this Christmas the same customer will need to pay £480 for energy during December alone.
“A 262% increase, or in real terms, having to find an extra £297 in one month isn’t financially feasible and will inevitably lead to more people living without the essentials to survive during winter because they can’t afford to put money in their meter.”
He warned: “It has now gone beyond a choice of whether to eat or heat, for some it’s life or death.”
He also highlighted that unlike Direct Debit customers, who can “soften the blow” of price increases by spreading their energy costs over 12 months, prepayment meter users feel the impact far more acutely as they don’t have a credit or buffer to tide them over the heating season and cold winter months when costs increase.
In simple terms, he said: “No money means no energy.”
He added: “It’s a desperate situation for a lot of people and sadly, without further UK Government support, it’s only going to get worse. For millions of prepayment customers, this could be a winter of disconnect.”
To date, more than 650,000 people have been supported by the Fuel Bank Foundation with crisis prepayment meter top ups. Following the April price cap increase, the charity saw a record number of people accessing its services, with around 1,200 people currently being helped every day.
However, Mr Cole said the rising energy prices are having a negative impact on the support the charity provides.
He explained: “Two years ago, a £49 fuel voucher would keep a meter topped up for up to two weeks for an average household. Now, it barely provides enough energy for four days.”
He urged the UK Government to do more to help those who are the most vulnerable and at risk of living without energy this winter.
“We are on the precipice of a national fuel crisis. The first act of the new prime minister needs to be to confirm that meaningful financial support to cover the rises announced today will be provided to those already struggling to pay their fuel bills, in addition to those who will be plunged into fuel poverty following the energy price cap increases,” he said.
His proposal includes a social tariff to help the most vulnerable in our society and some financial measure to cover the monthly uplift millions of households can expect.
The Fuel bank Foundation aims to provide same-day help and in 2021, it achieved this 96% of the time.
For more information, visit the website here.
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