‘I’m frightened’: prepaid meter users feel early impact of price hike
Amid the highest UK inflation for 30 years and a cost of living crisis, some people who pay for their energy usage by direct debt may not feel the 54% rise of the price cap until their next bill lands.
However, for the 4.5 million people using prepayment meters the impact of the 1 April hike is already being felt. They also face a higher annual price cap for average use of £2,017 rather than £1,971 for those who pay by monthly direct debit.
Prepayment meters “trap people in fuel poverty” by charging above-average rates, according to research by the charity Church Action on Poverty. Low-income households make up the majority of users and the huge hike has prompted fears that more people will be forced to choose between food and fuel as poorer families spend a higher proportion of their income on energy.
The government has come under fire in recent weeks for failing to do enough to support households about to be hammered by the increase. Analysis from the consultancy firm Cornwall Insight estimates the cap could be raised again later this year to £2,600.
The Guardian spoke to four people with prepayment meters on what the price rise means for them.
Tim Hooper, 50, Norfolk
When Tim Hooper moved into a housing association property in Norfolk in 2019, it seemed like a new chapter after two years living in hostels. However, because he agreed a debt relief order while homeless, he was unable to secure an energy contract and must use a prepayment meter.
After the energy price cap hike, the 50-year-old says he now expects to spend roughly £32 a week of his monthly £325 universal credit on energy costs – almost 40% of his income after housing costs. Until this month he paid about £22 a week.
“I’m really quite frightened,” he says. “There
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