For immediate release 28th June 2017
- • A quarter (25%) of households with a prepayment energy meter installed have never switched supplier
- • Almost half (45%) of those with prepayment meters don’t understand how their energy tariff is calculated
- • Almost one in five (18%) households with meters didn’t know they could switch energy provider because they had a prepayment meter installed, while 19% didn’t know they would save any money by switching
- • Over 450,000 households with prepayment meters across Britain would prefer to speak to someone face to face about the available options to change energy provider
New research from leading independent energy comparison website www.moneyexpert.com1 reveals householders with prepayment meters, often some of the most vulnerable members of society, are the least likely to switch energy provider.
A quarter (25%) of households with a prepayment energy meter have never switched supplier, compared to 19% of those who pay a monthly bill for their energy usage. Just 13% of those with a pre-payment have switched provider in the last year compared to 22% of those who pay monthly.
Regulator OFGEM has introduced a price cap for prepay customers which came into effect on April 1st following recommendations from the Competition and Markets Authority which found the cheapest bills for prepayment customers can be between £260 and £320 more than for direct debit.
Prepayment meters work on a pay as you go basis via a prepayment key or card that is slotted into the meter. Almost one in five (18%) people with a prepayment meter didn’t know they could switch energy provider, because they had a prepayment meter installed, while 19% didn’t know if they would save any money by switching. A further one in five (19%) householders with a prepayment meter thought the process seemed too much effort despite it being an easy process handled through face-to-face support, on the phone or online.
Almost half (45%) of those with prepayment meters don’t understand how their energy tariff is calculated, compared to 37% of those on a pay monthly energy tariff. People don’t understand that tariff units act essentially as a form of measurement, which explains how much people are paying for their power represented as pence per kilowatt-hour (p/kWh).
Shockingly a fifth (19%) of people don’t think or don’t know the energy tariff they are on impacts the price they pay for electricity. Almost two thirds (64%) also don’t think or don’t know the region they live in will affect how much they pay for energy and 32% don’t realise their payment method impacts the price they pay. It is worrying when all these factors can impact the price a family will pay for their power.
The research identified a worrying lack of awareness about the process of switching and time the process takes, with 15% of those with a prepayment having no understanding of how to change supplier. A further 37% said they understood some of the process but were not completely sure on how to go about it or the timescales involved. The study found 463,410 households with prepayment meters across Britain would prefer to speak to someone face to face about the available energy switching options.
Mike Rowe, Chief Operations Officer, at MoneyExpert.com said: “There is an obvious need for increased support to help people with prepayment meters switch energy provider. The Government should be doing everything it can to highlight how this vulnerable sector can save large amounts of money by changing provider, which is a really easy process that can be handled face to face. People across the country could save millions simply by taking fifteen minutes to see if there is a better power deal available.”
People with prepayment meters are making desperate attempts to cut their energy bills. The research highlights 66% of those on prepay meters do moderate their energy usage to try and save money such as turning off lights and choosing eco-setting on appliances. Sadly this group don’t recognise they could probably save even more money simply by changing energy provider. A further 22% try to reduce their energy consumption but others in their household don’t.
Customers can get advice fromMoneyExpert.com on switching by calling 0800 011 1395 or emailing firstname.lastname@example.org
If you need any help don’t Ends
Notes to editors
1 Independent research conducted by Opinium among a sample of 2,011 UK household decision makers between April 7th and 12th 2017
For more information, please contact:
Citigate Dewe Rogerson
Kevan Reilly/Ewan Robertson
0207 282 1096/2981
MoneyExpert is one of the UK’s leading price comparison websites and has been helping people find the best finance deals for over 20 years. We compare current accounts, mortgages, savings accounts, credit cards, personal loans, prepaid cards, debt management plans, utilities & insurance products. MoneyExpert has helped more than 500,000 people save money on their energy bills over the last five years.
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