The Chancellor has announced a major financial change for customers on prepayment meters following fears of rising energy bills.
Customers who pay for their energy bills via a prepayment meter will no longer be subjected to "premium costs". Typically households would pay more on a prepayment meter compared to those on direct debit because they have to foot the extra cost of energy companies managing the meters.
However, rates will now become fairer as prepayment meter prices come more in-line with direct debit costs. According to the government, this will save customers an average of £45 a year.
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Speaking in the House of Commons, Mr Hunt said: "It is clearly unfair that those on prepayment meters pay more than others. We are going to put an end to that.
"From July, four million households won't pay more than those on direct debits. We've already cut energy bills by almost half this winter, and this latest reform is proof again that we're always on the side of families."
The government also stated that it supports Ofgem's work to review the cost of prepayment meters and has been formally asked to produce a report by the autumn on any "additional regulatory options, including options for ending the PPM standing charge premium, so that they are ready for implementation in April 2024."
It comes after reports revealed that debt agents working on behalf of British Gas had forced their way into vulnerable people's homes and fitted in prepayment meters with permission from courts. Firms were banned from this forced installation practice, however, that ban will end in April.
Energy Security Secretary Grant Shapps previously said: "Charging prepayment meter customers more to receive their energy is a tax on some of our most vulnerable - this change will stop that."
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