Power to 400,000 Scots is cut off as they run out of credit

Citizens Advice found that more than one in five (19%) prepayment meter customers - equating to nearly 100,000 Scots households - who were cut off in the past year spent at least 24 hours without gas or electricity, leaving them unable to turn the heating on or cook a hot meal.

Its research further found more than two million people across the UK, including an estimated 200,000 in Scotland were being disconnected at least once a month.

Citizens Advice said it saw more people who were unable to top up their prepayment meter in 2022 than in the whole of the last 10 years combined, breaking the charity’s predictions for the number of householders it would help as the cost-of-living crisis took hold.

Adam Stachura, head of policy and communications at Age Scotland said: "It is an absolute scandal that such huge numbers of people find themselves without the energy to heat or power their homes, particularly during our darkest and coldest months. It is fundamentally unfair that people with pre-payment meters, and who are often on the lowest incomes, pay the most for their energy and have no other choice but to do so. This energy cost crisis has demonstrated this injustice clearer than ever.

"Hundreds of thousands of older people live on very low and modest fixed incomes, unable to meet surging energy costs, instead living in one room and skipping hot meals.

"The impact on the health and wellbeing for the one in five households who go at least a day without electricity and gas is severe, and older households in this position could face particularly stark health complications. We already know that hundreds of people across Scotland have been treated for hypothermia in December, but the true scale of this will no doubt be much higher.

"It is vital that suppliers do much more to identify and support vulnerable customers instead of resorting to installing pre-payment meters."

The consumer watchdog said it was particularly concerned about disabled people and those living with long-term health conditions.

Citizens Advice said that its research based on a poll of over 4000 people across the UK conducted by Yonder Data Solutions in December found that almost one in five households (18%), including someone in this group who ran out of credit last year, went on to spend two days or more without energy supply.

Citizens Advice previously raised concerns to Ofgem and the government that it had seen evidence of suppliers forcing people in these groups onto prepayment meters. In October, Ofgem warned suppliers that not enough was being done to identify customers in vulnerable circumstances before installing a prepayment meter.

According to the consumer watchdog, in the month following Ofgem’s intervention more than a third of prepayment meter households including a disabled person, or someone with a long term health-condition, were cut off from their energy supply at least once. That’s over 150,000 struggling households left in the dark.

Ofgem stipulates that certain groups such as disabled people and those with long-term health conditions should not be forced on to a prepayment meter.

Citizens Advice previously raised concerns to Ofgem and the Government that it had seen evidence of suppliers forcing people in these groups on to prepayment meters.

The charity is now calling for a total ban on forced prepayment meter installations until new protections are introduced, ensuring households can no longer be fully cut off from gas and electricity.

It said it had heard from people forced on to a prepayment meter who were unable to top up even though their medication needed to be refrigerated, and a single parent with a young baby who was left in the cold and dark for 48 hours after her supplier switched her to a meter.

Stephanie Millar, policy manager at Citizens Advice Scotland said: "This research underlines what the Citizens Advice network in Scotland is seeing, with people having to choose between heating or eating.

“Prepayment meters tend to be used by the most vulnerable people in society, such as those who struggle financially or people who are disabled.

“When a prepayment meter runs out of credit, that’s it. You have no more heating until you top it up again.

“Too often we see people who have run out of credit and are unable to top it up, so they just have no heating or light or TV or digital devices. The contents of the fridge freezer go off, and the family can’t use their washing machine.

“For disabled people this can mean being to unable essential medical equipment or mobility scooters."

Advice Direct Scotland, which runs the national energy advice service energyadvice.scot, has urged people to to redeem energy rebate vouchers as the first expiry dates loom.

The charity received more than 1,000 enquiries directly related to the UK Government’s Energy Bill Support Scheme in the final quarter of 2022.

Almost one in five households in Scotland use prepayment meters for their gas or electricity. Most households will have £400 automatically taken off their electricity bills in six instalments across the winter, or will have the money added to their accounts.

However, those on traditional prepayment meters need the vouchers to get the discount. Vouchers worth £66 were sent out by post to prepayment meter customers from the start of October, as the first instalment of the Support Scheme.

Some consumers may have received an SMS text or email, depending on their supplier. Households with smart prepayment meters will be credited directly in the first week of each month.

The prepayment vouchers are only valid for 90 days - meaning those issued in October are due to expire.

Energy UK deputy chief executive Dhara Vyas said: “Suppliers are required to have exhausted all other options before installing a prepayment meter by warrant – only after repeated unsuccessful attempts to contact the customer to discuss repayment options and checks to ensure they do not go ahead when customers are in the most vulnerable situations.

“The energy industry is very aware of the challenges millions of households are facing right now – which means difficult decisions around indebted customers as suppliers are required to try and prevent them falling further into arrears. Any increase in bad debt ultimately ends up costing all consumers more money, as it is recouped from bills.

“Energy suppliers are discussing these concerns with the Government and the regulator, including looking at options to reduce the price that prepayment customers pay.”

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “The staggering extent of the prepayment meters scandal is now clear. Energy firms and the Government should hang their heads in shame."

Separately, more than 12 million people are now borrowing money for food or essential bills and half of them are doing so for the first time in their lives, according to a survey by the Money and Pensions Service (MaPS).

The poll of 2,180 UK adults suggests that 23% have relied on credit or money from family and friends to buy food in the last three months, and the same percentage have done so for electricity and gas.

It also showed that 21% think they will need credit to get through the next three months, with 4% of them saying they definitely would.

MaPS chief executive Caroline Siarkiewicz said: “Relying on credit or the generosity of family and friends to put food on the table, heat your home and keep a roof over your head can be a constant source of stress.

“For millions of UK households, it’s also a daily reality.

“If you’re already struggling, or you’re worried things are heading that way, it can feel like there’s no way forward.

“However, the first step to solving money problems is knowing where to turn.

“You can turn to us, free, in confidence and at any time, so I’d urge you to contact us for money guidance as soon as you think you need it.”