According to the National Housing Federation (NHF), in spite of new Ofgem rules, five of the big six energy companies still overcharge consumers using pre-pay meters. The UK energy regulator has estimated that annual service costs are GBP88 higher for pre-pay meter consumers than for a direct debit customer.
The NHF, which represents 1,200 housing associations in England, argues that companies including British Gas, Scottish Power, Npower, Scottish & Southern and E.On are all charging more than this.
A spokesman of Ofgem has been quoted by the BBC as saying: “It is a fact that price differences between pre-pay meters and other payment types have fallen sharply. We will continue to monitor suppliers’ compliance with the licence conditions and if differentials cannot be objectively justified we will investigate.”
Responding to National Housing Federation (NHF) on prepayment meter tariffs, the Energy Retail Association (ERA) said: “We dispute the National Housing Federation’s claims that some suppliers have breached licence conditions. Ofgem has put in place rules that make sure all customers – not just those on prepayment meters – are charged fairly according to what it costs suppliers to provide them with their energy. This is not a price control as the NHF suggests.
“Energy suppliers have already taken action to reduce prepayment tariffs, and in some cases, using a prepayment meter now costs less than paying by standard credit. Suppliers compete across all payment methods and tariffs, so it is important for customers to shop around to make sure they are on the best deal.”
However, to allow consumers to save about GBP100 a year off their energy bills, the UK has plans to replace old gas and electricity meters of approximately 26 million households in the country by 2020.
