PREPAYMENT energy meter customers on Universal Credit could see their entire payments effectively “wiped out” by soaring energy costs – or worse, be completely unable to pay for energy – new analysis from Citizens Advice Scotland (CAS) has found.
Around 470,000 households in Scotland pay for their energy in advance using prepayment meters, which is often far more expensive than paying by direct debit.
The Fuel Bank Foundation suggests monthly payments for prepayment customers could soon hit £595 per month – more than the standard allowance of Universal Credit across a range of claimant types.
For a single person under 25, the standard allowance is £265.31 per month, which is less than half of a forecast monthly pay-as-you-go energy bill.
Even for a couple over 25, the standard allowance is £527.72 – still falling short of the likely costs.
Prepayment customers are more likely to be living in fuel poverty than direct-debit customers and CAS is warning people will ration their energy use this winter due to costs or even self-disconnect, cutting themselves off from their energy supply completely.
The charity’s Extra Help Unit has already seen self-disconnection cases increase by almost 600% over the past year.
CAS chief executive Derek Mitchell said: “People will freeze or starve this winter without urgent and radical government action on the cost of living.
“For those on prepayment meters, their standard payment of Universal Credit could be entirely wiped out by their monthly energy costs.
“How are people supposed to live like that?
“For claimants under 25, their standard allowance won’t even cover their monthly bills. This isn’t sustainable for people, and makes the decision to cut Universal Credit by £20 per week a year ago seem even more short-sighted.
“If people are struggling with the cost of living, there may be additional benefits they are entitled to.
“The best thing you can do is seek advice. The CAB network offers free, impartial and confidential advice which is open to everyone.”
