Citizens Advice published a report on 30 September 2022 calling for a winter moratorium on moving customers to prepayment meters under warrant and on switching smart meters to prepay in an attempt to recover debt, to remain in place until April 20231.
The charity said the practice is escalating as financial pressures grow, with suppliers increasingly forcing customers onto prepayment meters so that they stop building up debt and so the supplier can collect part of the debt every time someone tops up2. It warned that a customer who is struggling to pay and is put onto a prepayment meter may not have enough money to top up, at which point their power is disconnected, a situation known as self-disconnection2.
"we want to see a winter moratorium on moving customers to prepayment meters under warrant and on switching smart meters to prepay in an attempt to recover debt"
The report sets out the wider pressure on bills. It says the Energy Price Guarantee caps how much customers can be charged per unit of electricity, meaning households will pay an average of £2,500 a year for their energy bill, but that bills will still be twice what they were last winter, and higher users, like some disabled people, will pay even more2. Millions of households are already in arrears, it adds2.
Separate figures collected by Citizens Advice and cited in a Commons Library debate pack show the number of people it had seen in 2022 up to October who were unable to top up their prepayment meter was more than for the whole of the previous five years combined1. The number seen who were having prepayment meters installed for debt was between 700 and 900 per month in nearly every month since November 2020, up from 400 to 500 in most months in the previous three years1.
The debate pack also records the price position before and after the Energy Price Guarantee took effect on 1 October 20221:
| Period | Direct debit, average dual fuel | Prepayment, average dual fuel |
|---|---|---|
| 1 April 2022 to 30 September 2022 | £1,971 a year | £2,017 a year |
| From 1 October 2022 | £3,549 a year | £3,608 a year |
Under the Energy Price Guarantee, prepayment customers pay a lower unit price for electricity than customers paying by direct debit, but a higher unit price for gas, and higher standing charges than all other customers for both fuels1. Ofgem reported in 2020 that there were 4.3 million electricity and 3.4 million gas prepayment meter customers, and said its data showed 1 in 7 customers self-disconnected during 2019, with more recent Citizens Advice data suggesting the numbers could be higher1.
Why it matters for households
A prepayment meter requires payment before energy is used, so a household with no credit has no supply1. Where a meter is installed or a smart meter switched to prepay to recover debt, the repayment comes out of each top-up, leaving less credit for the energy itself2. That links the household's energy independence directly to the timing of its income: the meter, not the supplier, decides when supply stops.
The rules already restrict this. Suppliers can force-fit a prepayment meter by warrant only after taking all reasonable steps to agree payment, and it should be a last resort to avoid disconnecting supply1. Suppliers cannot force-fit under warrant for people in very vulnerable situations who do not want one, or charge them warrant costs on debts, and cannot use warrants on people who would find the experience very traumatic; warrant charges for debts are capped at £150 for everyone else1. Ofgem's letter to suppliers in November 2022 expressed concern over remote switching of smart meters to prepayment mode1. The moratorium Citizens Advice seeks would go further, pausing both routes through the winter.
What happens next
The Commons Library debate pack records that a debate was scheduled in the Commons Chamber for Thursday 15 December 2022 on self-disconnection of prepayment meters, chosen by the Backbench Business Committee and opened by Anne McLaughlin MP1. Anne McLaughlin introduced a Private Members Bill on Pre-payment Meters (Self-disconnection) under the Ten Minute Rule; it was read a first time on 19 October 2022 and is due for Second Reading on Friday 24 March 20231. No government decision on the moratorium has been reported.
Sources2 cited
- Subject:, researchbriefings.files.parliament.uk
- Out of the cold? Helping people on prepayment meters stay connected this winter - Citizens Advice, citizensadvice.org.uk