Thousands of pre-payment meter customers will pay MORE when new price cap comes in next month
More than 200,000 prepay energy customers will see their bills rise from April
THOUSANDS of prepay meter customers will see their bills rise when a new price cap comes into force on April 1.
The price cap is intended to benefit households who prepay for their energy, but some customers will be left paying more.
While many of the UK's four million prepay households will see their bills drop next month - by around ten to 15 per cent - more than 200,000 customers will see their bills rise, reports.
It means that around four million households that use prepay meters will save up to £80 a year.
While energy firms have been mostly quiet about how the introduction of the cap will affect bills, some have now released figures showing how prices are likely to change.
E.ON says that from April 1, about 75 per cent of its 500,000 prepay customers will see bills drop, with typical savings of about £64 a year.
But due to a rise in non-energy costs, which impact electricity bills, "some customers will see a small increase," the supplier said.
MOST READ IN LIVING
Npower admitted that while the majority of its 300,000 prepay customers would see average electricity prices drop by 3 per cent, gas prices by 15 per cent, and dual fuel prices by 9 per cent, it said about 50,000 of its "very low" electricity users would see prices rise by an average of £22 a year.
Those who do see their bills rise and also get the Warm Home Discount will receive vouchers to offset the increase, the supplier said.
EDF said that it was "reviewing its prepay tariff prices" but that the price from April "will include a decrease for standard variable prepay customers, the level of which is yet to be finalised".
SSE said that while all of its prepay gas customers would see an average 13 per cent drop in gas prices, half of prepay electricity customers would see bills reduce by 2 per cent and the other half would see an average 3 per cent increase.
What is a prepayment meter and are they more expensive?
Prepayment meters are a type of domestic energy meter. With a prepayment, or ‘pay as you go’ tariff, customers pay for their energy before they use it. This is done via a smartcard, token or key that can be topped up at a corner shop or online.
Around 4 million people in the UK have a prepayment energy meter, but those on prepayment meters typically pay more for each unit of energy they use than standard customers.
Also, unlike customers on standard meters who can choose from a range of tariffs, prepayment customers sometimes only have the choice of one plan, as energy providers often offer just one tariff to prepayment customers, which is usually far more expensive than the supplier’s best tariffs.
SSE said: "While overall more than 75 per cent of its customers will save, up to 150,000 will see bills rise by an average of £16 a year."
British Gas said that its gas unit prices would reduce to comply with the cap. “The prices paid by our prepayment meter customers will comply with the cap, and our gas unit rates are reducing accordingly, ” a spokesperson told The Sun Online.
Scottish Power has yet to confirm how its prepay customer's bills will be affected by the cap.
Ofgem's price cap follows a two-year investigation that found competition among suppliers for prepayment customers is less developed than for those who pay by direct debit, cash or cheque.
This means that there are fewer tariffs available to pre-pay households, and the ones that are available are generally more expensive.
The cap is due to expire at the end of 2020 when the roll out of smart meters is set to be completed, which is expected to give prepay customers access to better deals.
How to find out if you're one of the households which will see their bills rise
ENERGY suppliers say they have already written to all affected customers explaining how the prepay cap changes affect them, and whether their bills will rise or fall.
Customers should have already received these letters, but those who haven't should contact their energy supplier.
We pay for your stories! Do you have a story for The Sun Online news team? Email us at [email protected] or call 0207 782 4094