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Pre-payment customers collectively overpaying £390m

4.1 million customers over paying a lot more than necessary.

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By Matt Maynard · 10th June 2020

New research published by comparethemarket.com has revealed 4.1 million people are paying on average £94 more a year than they would on a normal credit meter. 

Like other energy tariffs on the market, prepayment tariffs can be either fixed or variable, and much like other tariffs, variables tend to be the most expensive on the market. 64% of prepayment customers on a standard variable tariff are paying on average £1,195 a year - £39 more than a non-prepayment meter SVT. A fixed prepayment meter tariff is on average £33-a-year more expensive than a standard fixed tariff, too. 

There is a staggering £219 difference between the annual price for the average standard variable tariff and the average standard credit meter fixed term tariff. This difference rises to £431 per year when compared against the cheapest fixed credit meter tariff on the market. 

It seems customers on prepayment meters are very limited in their choice of energy deals. The research conducted revealed that there are just four fixed prepayment meter tariffs customers can switch to, and only 45 variable. When compared to the 293 tariffs on option for non-prepayment customers, there really isn't much choice. 

Head of Energy at comparethemarket.com, Peter Earl, said: 

“It is hugely concerning that prepayment meter customers – some of whom are undoubtedly classed as vulnerable – are paying considerably more for their energy on average than those on a standard credit meter."

“According to the latest government fuel poverty statistics over two million households are living in fuel poverty. British Gas’ swift reversal of its decision to only allow top-up of its prepayment meters by a minimum of £5 earlier in the year underlines how far consumers struggling to make ends meet must make each pound go.”

Source: Energy Live News

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