Energy bills: Britons with prepay meters could be hit with £700 a month bills | Personal Finance | Finance
Last week, Ofgem confirmed that the energy price cap will rise, increasing the average energy bill to £3,549. This means households could be paying this and even more.
There are around four million customers on pre-payment meters, which effectively pay-as-they-go for their energy.
If someone is in debt on a prepayment meter, the amount they owe can be deducted when they next top up.
With energy bills set to rise, and the demand becoming higher in the winter, analysts at the Resolution Foundation said typical energy costs during winter will be three times higher than they were last winter at around £500 a month.
Typical energy bills in January alone could hit £714 – which could be over half of someone’s monthly disposable income.
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The think tank’s chief executive Torsten Bell warned: “Even with the targeted payments and the universal £400 rebate already committed, a winter catastrophe is coming unless extra support is provided, with families forced to turn off their heating, or fall behind on bills and run up arrears.”
All the major energy companies including British Gas, Eon, EDF and Scottish Power can take up to 100 percent off a top up to cover electricity debts.
For example, if an agreed weekly debt repayment amount of £10 for electric and someone tops up £10, the firms will put the full amount towards the debt and leave them nothing for current usage.
The exact proportion of a top up that goes on paying back debts will depend on how much a customer has agreed to repay and how much they are topping up.
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A spokesman from Citizens Advice said: “Of those who won’t be able to pay in October, 68 percent have a household income of less than £30,000.
“Some will bear the brunt of rising energy bills, with 3.2 million disabled people and 4.4 million families with children set to be unable to afford October’s hikes.
“On average, those who can’t afford autumn’s predicted rise will end up almost £100 a month in the red.
One way to combat the rising bills is to check what benefits people may be entitled to.
Over £15billion is being unclaimed by low income households across the UK.
