Almost half a million could be forced onto pricey pay-as-you-go meters by the end of the year, warns Citizens Advice

More than 450,000 people could be made to pay their energy bills with a prepayment meter by the end of 2022, because they’ve fallen into debt. That’s on top of the millions of people already on them.

This is according to new analysis from Citizens Advice, which comes the day before the price cap increases to a record high. The charity analysed Ofgem data on the number of customers moved to prepayment meters due to their existing debt to make its predictions for this year.

Under current rules, energy companies can push someone onto a prepayment meter when they can’t pay their bills. This means they have to ‘top up’ in advance to keep the lights and heating on. People who pay-as-they-go for their energy are at particular risk in the winter months because they can’t spread the cost across the year, like direct debit customers. 

The charity’s advisers have seen people who have resorted to unplugging fridges and freezers, washing clothes by hand and skipping meals to cut back on their energy costs. This year, Citizens Advice has already supported record numbers in desperate situations because they simply can’t afford to top up. 

The number of people coming to the charity because they’ve been forced onto a prepayment meter has also shot up 138% in the last two years. It’s now significantly higher than it was before the pandemic. 

Millions will be left out in the cold

Citizens Advice predicts households that pay-as-they-go could spend £258 more on their energy this winter than someone paying by direct debit. With 4 million households expected to be on prepayment meters this winter, collectively these customers will spend more than £1bn on energy compared to direct debit customers. 

Energy suppliers won’t disconnect customers who can’t afford to pay their bills this winter, when they are worried about their safety. But by pushing people onto prepayment meters, they’re putting them at risk of disconnecting themselves.

Citizens Advice’s frontline insights show people who should be protected are still being forcibly moved. The charity is calling on the government to bring in a winter ban on energy suppliers shifting people onto prepayment meters and further targeted support to help those on the lowest incomes. 

Fay’s story: “It’s getting cold and I have no gas because I can’t afford to top up”

Fay is one of many people Citizens Advice is supporting who cannot keep up with the costs of a prepayment meter. She lives alone and has found it difficult to find work due to a health condition. With costs rising, she’s struggling to manage on her Universal Credit payment.  

Fay is having to limit the gas and electric she uses at home, because she can’t afford to top up her meter. She said:

“It’s getting cold now and I have to cut right back on energy because I can’t afford to top up my meter. I’m not using gas at all and only very little electric. I can’t ask my energy supplier for any more free credit until December. 

“So for now I’m turning everything off. I’ve even turned the oven off as the clock takes electric. I don't have the internet at home or on my phone, as I can't afford it. I rarely have money to buy food from the shop, but when I do I constantly have to make choices like can I afford bread and milk or just bread. It’s got to the stage where I’m not having hot showers, I’m just washing with water from the kettle.

“Living like this is really stressful. There are days when I just sit here and cry my eyes out and think `why am I here?’”

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“Energy companies have a duty to protect customers, but forcibly moving people in debt onto prepayment meters is disconnection by the backdoor. 

“Even with the bill freeze in place, the cost of energy will still be at a record high. If people can’t afford to top up, they’re at real risk of the heating going off and the lights going out.    

“The Government must bring in a winter ban to stop energy companies forcing people already struggling onto prepayment meters. It should also bring in targeted support to help people on the lowest incomes pay their bills.”

Notes to editors

  • Full analysis can be found in Citizens Advice’s report Out of the Cold?

  • To generate annual estimates, Citizens Advice has multiplied Ofgem’s published figures on the annual number of installations/remote switches of electric prepayment meters for debt with the latest ONS figures on the average size of the UK households between 2015 and 2021.

  1. It has used the number of installations and remote switches to electric prepayment meters (as opposed to gas and electric) as a proxy for the number of households forced onto a prepayment meter for debt. 

  2. Ofgem’s figures for 2022 on forced prepay installations and remote switches for debt have not yet been published. Citizens Advice’s prediction for 2022 is based on the same percentage increase seen in Ofgem’s data on the ‘number of accounts with a consumer repaying an energy debt’ for electricity (see above on why we are using electric accounts as a proxy for households) between an average for 2021 and Q1 of 2022 (a 19.4% increase), and which can be found in their data portal

  3. Over the last fifteen years, the trend in the number of customers repaying an energy debt has tracked closely with the number of installations and remote switches to a prepayment meter for debt. 

  • Frontline staff at Citizens Advice have already supported record numbers of people in desperate situations. In 2022, the charity has seen record numbers of people who cannot afford to top up their prepayment meters - nearly as many as the previous three years combined. See slide 3 of the cost of living data dashboard for our data on the cumulative number of people we are seeing who cannot top up their prepayment meter:  

  • For the numbers of people seeking support from Citizens Advice, see page 22 of the cost-of-living data dashboard and select ‘Prepayment meter installed for arrears: The 138% figure was found by calculating the difference between our monthly figure for August 2022 and August 2020. 

  • Average monthly spend methodology: These costs have been calculated using Ofgem's medium Typical Domestic Consumption Values for the October 2021 prepayment price cap, the October 2022 prepayment Energy Price Guarantee of £2,560, and for the Energy Price Guarantee for direct debit customers of £2,500. Monthly usage figures are based on Ofgem estimates of the amount of the annual bill value it is expected consumers will use in each month of the year. While Citizens Advice has focused on direct debit customers in this report, this unit rate also applies to all customers with a credit meter.

  • Energy suppliers have committed not to knowingly disconnect consumers in vulnerable circumstances between 1st of October and March 31st each year. This is known as “the winter moratorium”. Further information and advice is available on the Citizens Advice website.

  • Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.

  • Our network of charities offers impartial advice online, over the phone, and in person, for free. 

  • We helped 2.4 million people face to face, over the phone, by email and webchat in 2020-21. And we had 40 million visits to our website. For full service statistics see our monthly publication Advice trends.

  • Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,600 service outlets across England and Wales.

  • Citizens Advice is the largest provider of free, multi-channel debt advice. Providing that help gives Citizens Advice unique insight into the types of debts people struggle with.

  • Citizens Advice is the statutory consumer advocate for energy and postal markets. We provide supplier performance information to consumers and policy analysis to decision makers. 

  • You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.