Energy regulator Ofgem to review pre-payment meter push

Energy regulator Ofgem Topping up a pay as you go Mains electric digital prepaid card credit meter with a key
Energy regulator Ofgem vows to protect billpayers from 'inappropriate' pre-payment meter practices. Photo: PA/Alamy

Ofgem is set to investigate energy companies after a “sharp” increase in the number of households struggling to pay their bills being forcibly switched to pre-payment meters.

In a blog, the watchdog's chief executive Jonathan Brearly said he was concerned about the “sharp growth in households struggling to pay their bills being switched over to pre-payment meters, sometimes without their even knowing about it, leaving them without heating”.

It comes after business secretary Grant Shapps demanded that energy suppliers stop forcing vulnerable households to switch to pre-payment meters. He also said he would "name and shame" the worst suppliers of this practice.

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The review will focus specifically on self-disconnections, remote switching and forced installations, he added.

"The numbers of forced installation of pre-payment meters is extremely high. It is simply not acceptable that vulnerable customers are left in the dark and cold in winter," Brearley wrote.

Hundreds of thousands of customers have been switched over to more costly pre-payment meters, often unwillingly and without the offer of support, after failing to keep up with rising energy payments.

Citizens Advice estimates that 3.2 million people in Britain ran out of credit on their pre-payment meter last year, the equivalent of one every 10 seconds.

Some have found their smart meters switched to pre-payment mode remotely while others have been confronted at their door by teams sent by energy companies ⁠— armed with magistrates’ court warrants ⁠— to physically make the change.

Campaigners say those switched often then go without power as they cannot afford to keep the meter topped up ⁠— something that is referred to as “self-disconnection”.

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He also called for a "serious assessment" of a social tariff for household energy prices which would see those most vulnerable and least able to pay charged a lower price for their power.

In a speech at the Institute for Government, Brearley said that cheaper social tariffs for vulnerable households should be considered as a long-term option for tackling unaffordable bills.

"We are calling for a serious assessment of a social tariff," Brearley said. "If it can be made to work, this could tackle the root cause of this issue and the distress that many customers are in this winter."

Watch: What is the Demand Flexibility Service and how can I save £100 off my energy bill if I sign up?