It’s time to stop forcing people onto prepayment meters — here’s why

Being able to heat and power your home to safe levels is a necessity, not a luxury. But we’ve found that millions of households are regularly forced to live in the cold and the dark because they cannot afford to keep their prepayment meter (PPM) topped up.

1 in 3 (33%) people on PPMs had disconnected at least once in the past year because they could not afford to top up. That’s more than 3 million people, or 1 person every 10 seconds. And for most it’s not just a one off. More than 2 million people are being disconnected at least once a month.

Perhaps the most damning finding is that more than 130,000 households including a disabled person or someone with a long-term health condition (LTHC) are being disconnected from their energy supply at least once a week because they can’t afford to top up. Energy supplier regulations state that people in vulnerable circumstances, including disabled people and people with LTHCs, should not be moved onto PPMs. It simply isn’t safe to do so. Our research lays bare the consequence of years of failure to enforce these rules.

We also found that people are severely rationing their energy use to try and keep costs down. Half (51%) of PPM customers have turned their heating down or off, 3 in 10 (27%) have cut back on food spending and 1 in 10 (10%) have visited a foodbank.

Disconnection is dangerous

When a PPM isn’t topped up the household power or gas supply is completely disconnected. No heat. No light. No hot water. Nothing.

It’s not surprising then that 63% of PPM users who had disconnected in the last year said it had a negative impact on their mental health. This rises to 79% of disabled and people with LTHCs. Nearly half (47%) reported a negative impact on their physical health, rising to 64% amongst disabled people and people with a LTHC.

27,500 people came to Citizens Advice for help in 2022 because they could not afford to keep their meter topped up — more than the whole of the last 10 years combined. Their stories are harrowing.

Sam is a single parent who lives alone with a 5 year old child. She relies on a breathing machine for severe asthma and refrigerated medicine for her diabetes. Despite these vulnerabilities Sam is on a prepayment meter. They were cut off from their electric supply for 2 days because they couldn’t afford to top up their meter, which meant she couldn’t charge her breathing machine or keep her medicine refrigerated. They were also cut off from their gas supply the week earlier. Sam has called her supplier and asked for help, but was told that they couldn’t provide her with any more help before putting the phone down.

Are we really ok with this?

Citizens Advice has been raising concerns about the risks of PPMs for years. However, the world has changed and the situation is now critical.

Low income households simply cannot afford to heat and power their homes to safe levels. And while energy prices are expected to fall from their current level, they’re forecast to remain significantly higher than they were before the recent spike in prices until the end of the decade.

As a society it’s time to decide whether we believe that people being cut off from power and heat is acceptable. In water we’ve already made a clear choice — water suppliers have been banned from disconnecting customers for more than 2 decades.

Disconnection of energy supply for households on credit meters is also effectively banned. So why is people being disconnected from PPMs any different? PPMs pass responsibility for disconnection from the supplier to the customer, but the result is exactly the same.

We’re calling for a total ban on the forced installation of new PPMs until additional safeguards are put in place to end self-disconnection. This ban must include legacy PPMs and remote switches for smart meters.

And it’s not enough just to look at people being newly moved onto prepayment meters when there are already millions of people who are struggling to top up their meter. We are also calling for a review of all users of prepayment meters, with a commitment to replace them with credit meters where this is necessary to remove the risk of disconnection.

Households which remain on prepayment meters must be offered a quick and straightforward route to securing additional support, for example non-repayable emergency vouchers, additional credit and practical debt remedies like debt holidays.

This could lead to an increase in energy debt — but the cost of doing nothing is far worse.

We know that the consequence of this change could be a significant increase in the amount of energy debt households will build up in the coming months and years. But the cost of doing nothing is condemning many low income households to sit in cold and dark homes, with severe consequences for their health and well-being.

In a world where low income households cannot afford to heat and power their homes to safe levels, energy debt is the least worst option. Society would also benefit from the reduction in health complications arising from severe self-rationing and disconnection at a time when the NHS is under intense pressure.

Ensuring consumers are protected

The recent market turmoil and intervention from the government through the Energy Price Guarantee, is an opportunity to rethink the responsibilities of energy suppliers. A pause on forced moves to PPMs is an opportunity to ensure consumers are protected while these broader conversations play out.

What to do about energy debt building up must also be part of this conversation. We don’t expect energy suppliers to shoulder responsibility for the broader cost-of-living crisis alone and are committed to working collaboratively with Ofgem, Government and Industry to find a workable solution.

If and when energy prices return to more affordable levels, there may well be a place for PPMs to once again work as an effective budgeting tool for those who make that choice. But they must look very different to the PPMs of today. Ofgem and industry must ensure that appropriate safeguards and support are in place to ensure disconnections — by whatever means — are a thing of the past.