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Daily Mirror
Daily Mirror
Business
Alice Peacock

Energy bill warning as 5.5million households 'will pay up to £160 more' in weeks

Some 5.5 million households who will miss out on government assistance on energy bills are reportedly set to pay more for their power within weeks.

On average, these customers will end up paying £160 more than those who pay by direct debit or through a prepayment meter.

Under both the government's Energy Price Guarantee and Oftem's Energy Price Cap, households pay different unit rates and standing charges.

This was dependant on how they paid their bills and where they lived.

However, this was set to change in July after the Treasury confirmed the end of the "prepayment meter penalty".

Ofgem figures obtained by The Sun showed that 5.5 million households who pay for their energy bills by standing order will miss out on new government help and face paying more.

The cheapest way to pay your energy bills is currently via direct debit - with those using prepayment meters paying around £45 more each year.

A typically household pays no more than £2,500 a year, a figure based on the average home going through 2,900kWh of electricity and 12,000kWh of gas a year.

From July this price discrepancy, known as the 'prepayment meter penalty', would end with customers using prepayment meters paying the same rates as those who pay by direct debit.

This change is expected to help roughly 4 million households, but those who pay on receipt of their bill still faced paying more.

Latest Ofgem figures showed that around 2million households paid their energy bills quarterly either by cheque of cash, while up to 3 million more were thought to pay their bill with a standing order.

These households faced higher standing charges and unit rates, which worked out to see a typical household in these groups paying £160 more a year for their energy bills than necessary.

Matt Copeland, head of policy and public affairs at National Energy Action, said reports that the government would scrap the prepayment meter premium were welcome.

"But it is important that those on standard credit are not left out in the cold at the same time," he said. "You should not have to pay more for your energy because you pay by cheque or in cash, on receipt of bill.

"These are predominantly older, more digitally excluded households and should not face more than a hundred pounds of extra costs, simply because of how they pay.

"We urge the government to rectify this disparity at the same time as doing so for prepayment meter customers."

The Mirror has contacted the Treasury for comment.

The news comes after the Mirror last month reported that energy bills will eat up 10% of the average worker’s salary when prices jump again in April.

New research from the Trades Union Congress ( TUC ) showed households are set to see their annual energy bill leap by a fifth as the Tories scale back support.

The Government’s Energy Price Cap is currently £2,500 a year for an average household - but will rise to £3,000 in April.

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