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Prepay energy customers paying £226 a year more

3 July 2015

Prepay energy customers pay an average of £226 more per year than they would on the cheapest online direct debit deals, reveals new analysis by Citizens Advice.

The national charity today releases figures comparing energy companies’ cheapest prepayment meter (PPM) tariffs with their best online direct debit deals.

It shows PPM customers pay on average 22 per cent more.

The consumer champion also provides a regional breakdown, which shows that the differences in prices are widening across the country. The charity says this highlights competition is not working for all consumers.

Citizens Advice calls on CMA to address unfairness in energy market

The figures come as the Competition and Markets Authority (CMA) is due to publish interim findings from a major energy industry investigation.

Citizens Advice says the CMA review is an ideal opportunity to tackle unfairness in the energy market and ensure the poorest and most vulnerable customers, including those on PPMs, are better served.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Prepay energy consumers get a raw deal.

“Our research shows many PPM customers have to fork out hundreds of pounds more than those on online direct debit deals. This unfairness leaves some of the poorest people struggling to heat their homes and keep the lights on.

“Since the launch of our campaign some suppliers have said they will improve their PPM offer, but there is still a long way to go.

“The CMA investigation provides an opportunity to overhaul the energy industry and make it fairer - giving PPM customers a better deal is a crucial part of this.”

The Citizens Advice campaign, Fair play for prepay, prompted a recent Ofgem review of PPMs, after highlighting poor customer service, high costs, and a lack of choice for customers in the prepay market.

The charity says some suppliers have responded considerably better than others to the campaign, including a commitment from some to reduce prepay prices when they roll out smart meters.

SupplierCheapest dual fuel online direct debit tariffCheapest dual fuel prepay tariff£ difference% difference

British Gas

£1,156.11

£1,178.94

£22.82

2%

Co-operative Energy

£951.22

£1,356.47

£405.25

43%

E.ON

£1,101.07

£1,205.18

£104.11

9%

EDF Energy

£965.05

£1,228.33

£263.28

27%

Extra Energy

£924.85

£1,266.39

£341.54

37%

First Utility

£913.42

£1,232.38

£318.96

35%

npower

£1,040.09

£1,263.88

£223.80

22%

OVO Energy

£932.53

£1,168.23

£235.70

25%

ScottishPower

£941.21

£1,205.16

£263.96

28%

Spark Energy

£1,058.28

£1,240.72

£182.44

17%

SSE

£1,111.03

£1,237.94

£126.91

11%

Average

£1,008.62

£1,234.87

£226.25

22%

Citizens Advice data also looks at the regional spread of prices across different tariffs and payment methods.

In every energy region, the difference between the best available fixed term direct debit deal from any supplier and the worst PPM tariff increased between December 2014 and June 2015.

While this widening is due to cheaper deals becoming available for online direct debit, it highlights the absence of any competitive new deals for PPM customers.

RegionDifference between cheapest direct debit deal and most expensive PPM (December 14)Difference between cheapest direct debit deal and most expensive PPM (June 15)£ change between Dec 2014 and June 2015% change between Dec 2014 and June 2015

Eastern Electricity

£415.77

£448.52

£32.75

8%

East Midlands Electricity

£398.65

£457.83

£59.18

15%

London Electricity

£401.29

£467.87

£66.58

17%

Manweb

£411.14

£531.41

£120.27

29%

Midlands Electricity

£397.83

£455.88

£58.05

15%

Northern Electric

£390.58

£509.89

£119.31

31%

Norweb

£472.65

£571.03

£98.38

21%

SSE Scottish Hydro

£415.98

£554.41

£138.43

33%

Scottish Power

£377.62

£515.79

£138.17

37%

Seeboard

£394.83

£457.48

£62.65

16%

SSE Southern Electric

£431.61

£471.30

£39.69

9%

SSE Swalec

£402.19

£469.33

£67.14

17%

SWEB

£385.89

£452.84

£66.95

17%

Yorkshire Electricity

£401.46

£518.72

£117.26

29

Notes to editors

 

  1. Energy company price comparison data compared the best online direct debit dual fuel deals available from each supplier averaged nationally with the cheapest or only dual fuel prepay tariff from that supplier, averaged nationally. The charity also compared the best online direct debit deal available in that region with the worst prepayment tariff from any supplier in that region. The costs are given for a medium usage household in a snapshot taken on June 24, 2015.

  2. Our analysis includes energy suppliers who had both PPM and direct debt tariffs. This means that suppliers' white label company prices are not included in the results. For example, there is no comparison of British Gas’ PPM prices against the Sainsbury’s energy tariff.  

  3. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  4. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  5. To get advice online or find your local bureau in England and Wales, visit citizensadvice.org.uk
  6. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  7. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.