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British households paying their energy bills by cash, cheque or bank transfer are being billed £1.3billion a year more than those on direct debit, a report by Octopus Energy has found. While all energy firms are guilty – British Gas was found to be one of the worst culprits charging nearly £500million extra to people who don’t want to pay by direct debit. Furthermore, many customers affected are pensioners who prefer to use more traditional methods to pay their bills.
Some 680,000 older households – around a third of those affected – pay their energy bills using cash, cheque or bank transfer and are forced to pay six percent more as a result, according to the charity.
Age UK’s Caroline Abrahams is now asking Ofgem “to address unequal charging practices” that often affect the older generation and pensioners the most.
National Energy Action, a fuel poverty charity said, when bills increase again in April, customers who pay by cheque or cash “will be hit harder than most”.
British Gas, which has recently come under fire for sending debt collectors to ‘force fit’ prepayment meters, said: “The cash cheque tariff is set within the price cap. We always look to engage with customers about moving to direct debit and we highlight in all of our communications the savings they could make.”
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Meanwhile, five energy providers are offering up to £250 to customers who are struggling and British Gas is one of the energy companies offering this free credit.
British Gas is identifying thousands of customers who are on a prepayment meter who could be eligible for this £250 in free credit.
Anyone eligible will see the credit added to their prepayment meters over the next month so they won’t need to contact them.
The free bill credit comes as part of British Gas’ new £10million package for vulnerable prepayment customers.
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Thousands of energy customers face a bill rise within a matter of weeks – even if they don’t use any gas or electricity – but many could save up to £47 a month.
Britons on fixed-rate energy deals that are about to expire will see their standing charges increase by up to 100 percent from April if they are switched to their energy company’s standard variable tariff.
Standing charges are a daily fee applied to everyone’s energy bills which pay for supply and distribution costs and protect consumers whose company has gone bust, but millions could save £47 a month during the cost of living crisis.
Nearly one in 10 households – two million homes – don’t limit how often their heating can come on and leave the temperature of their home to be controlled by their thermostat.
Natalie Mathie, energy expert at Uswitch.com, said: “If your heating is coming on in the middle of the night when you’re tucked up under your duvet, that might be money down the drain.”
More support for energy bills and the cost of living is on its way – financial support due in February includes the Warm Home Discount, Cold Weather Payment and the £67 energy discount which is being paid to all households.
Customers on pre-pay meters will be sent discount vouchers by text, email or post that they will need to redeem themselves.
The Warm Home Discount of £150 should also be paid to those eligible before March 31, which is usually discounted from their energy bills by their supplier.
