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| Pre-pay meter energy users pay £226 a year more: Citizens Advice | Pre-pay meter energy users pay £226 a year more: Citizens Advice |
| (about 5 hours later) | |
| Energy customers on pre-payment meters have been paying an average of £226 a year more than they would have done on the cheapest direct debit tariff, Citizens Advice has said. | Energy customers on pre-payment meters have been paying an average of £226 a year more than they would have done on the cheapest direct debit tariff, Citizens Advice has said. |
| The charity said the gap between the cheapest and most expensive tariffs widened by up to a third in six months. | The charity said the gap between the cheapest and most expensive tariffs widened by up to a third in six months. |
| Co-Operative Energy, which had the widest gap of £405, responded by saying it was cutting its pre-payment rates. | Co-Operative Energy, which had the widest gap of £405, responded by saying it was cutting its pre-payment rates. |
| It comes ahead of the results of an inquiry into the whole energy industry. | It comes ahead of the results of an inquiry into the whole energy industry. |
| The Competition and Markets Authority (CMA) began its investigation a year ago, and is due to report on Tuesday. | The Competition and Markets Authority (CMA) began its investigation a year ago, and is due to report on Tuesday. |
| "The CMA investigation provides an opportunity to overhaul the energy industry and make it fairer," said Gillian Guy, the chief executive of Citizens Advice. | "The CMA investigation provides an opportunity to overhaul the energy industry and make it fairer," said Gillian Guy, the chief executive of Citizens Advice. |
| "Giving pre-payment meter customers a better deal is a crucial part of this." | "Giving pre-payment meter customers a better deal is a crucial part of this." |
| Analysis | Analysis |
| By John Moylan, BBC industry correspondent | By John Moylan, BBC industry correspondent |
| It's not new that those least-able to afford high bills are paying over the odds for energy. But what's striking about this report is both the size of the differential - up to £400 - and the timing of the publication. | It's not new that those least-able to afford high bills are paying over the odds for energy. But what's striking about this report is both the size of the differential - up to £400 - and the timing of the publication. |
| It comes just days before the the initial findings from the year-long CMA probe into the energy sector. | It comes just days before the the initial findings from the year-long CMA probe into the energy sector. |
| That's expected to highlight the plight of millions of customers who either can't or don't switch and come up with remedies to change this. | That's expected to highlight the plight of millions of customers who either can't or don't switch and come up with remedies to change this. |
| It could be a landmark moment for the entire industry. | It could be a landmark moment for the entire industry. |
| The Citizens Advice report feels like a shot across the CMA's bows - a warning that the energy market has to change to work better for millions of vulnerable customers - not least the increasing number of households that are tied to a pre-payment meter. | The Citizens Advice report feels like a shot across the CMA's bows - a warning that the energy market has to change to work better for millions of vulnerable customers - not least the increasing number of households that are tied to a pre-payment meter. |
| 'Shop around' | 'Shop around' |
| Those who have pre-payments meters are more likely to be on a low income, and 80% of those getting them installed are already in debt. Those who fall behind with payments can be forced to have them, if their supplier obtains a court order. | Those who have pre-payments meters are more likely to be on a low income, and 80% of those getting them installed are already in debt. Those who fall behind with payments can be forced to have them, if their supplier obtains a court order. |
| Users pay for their electricity or gas in advance, by topping up cards or buying tokens. | Users pay for their electricity or gas in advance, by topping up cards or buying tokens. |
| In the most extreme example, a customer of Co-operative Energy would have had to pay £951 a year if on the cheapest online direct debit deal, but £1,356 if they had a pre-payment meter - a difference of £405 a year. | In the most extreme example, a customer of Co-operative Energy would have had to pay £951 a year if on the cheapest online direct debit deal, but £1,356 if they had a pre-payment meter - a difference of £405 a year. |
| But having had the contrast pointed out to them by Citizens Advice, the company said they would close some of the gap. | But having had the contrast pointed out to them by Citizens Advice, the company said they would close some of the gap. |
| Co-operative Energy told the BBC: "Following contact with Citizens Advice, we have taken the opportunity to review our dual fuel pre-payment tariff and will be reducing it to match the cheapest of the Big Six rates immediately." | Co-operative Energy told the BBC: "Following contact with Citizens Advice, we have taken the opportunity to review our dual fuel pre-payment tariff and will be reducing it to match the cheapest of the Big Six rates immediately." |
| It said the tariff had 214 customers and was expensive to manage because accounts were updated manually. | It said the tariff had 214 customers and was expensive to manage because accounts were updated manually. |
| By contrast, British Gas charges pre-payment customers £22 extra. | By contrast, British Gas charges pre-payment customers £22 extra. |
| Responding to the figures, the energy industry said it was committed to delivering fair and competitive tariffs for all customers. | Responding to the figures, the energy industry said it was committed to delivering fair and competitive tariffs for all customers. |
| "Suppliers are constantly reviewing their tariffs. We urge customers to shop around for the deal that suits them best," said a spokesperson for Energy UK. | "Suppliers are constantly reviewing their tariffs. We urge customers to shop around for the deal that suits them best," said a spokesperson for Energy UK. |
| Last month the energy regulator Ofgem found that some pre-payment customers were charged as much as £180 to have meters installed - and up to £160 to have them removed. | Last month the energy regulator Ofgem found that some pre-payment customers were charged as much as £180 to have meters installed - and up to £160 to have them removed. |
| It wants energy suppliers to stop the practice by the autumn. | It wants energy suppliers to stop the practice by the autumn. |