Millions of people who don't pay for their energy via direct debit or a prepayment meter will reportedly be charged more for their power within weeks.
Households who pay via standing order, credit, debit card or cheque will face higher bills - and end up paying, on average, an extra £160 say reports. Figures obtained by The Sun suggest that 5.5 million households will be impacted.
Its because these households will not receive new support measures from the Government. Under Ofgem's Energy Price Cap and the Government's Energy Price Guarantee, unit rates and standing charges are affected by factors such as how households pay their bills and where they're located.
But this will no longer be the case in July after the Treasury confirmed the end of the "prepayment meter penalty". At the moment, the cheapest way to pay your energy bills is via direct debit as households that pay through a prepayment meter currently pay approximately £45-a-year extra.
An average household that uses 2,900kWh of electricity and 12,000kWh of gas annualy will pay a maximum of £2,500-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 four million households, but those who pay on receipt of their bill still faced paying more.
Latest Ofgem figures showed that around two million households paid their energy bills quarterly either by cheque of cash, while up to three 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 added that those on standard credit sould not be left out in the cold. He said: "You should not have to pay more for your energy because you pay by cheque or in cash, on receipt of bill.
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"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 Treasury has been conacted for comment.
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