Amid the highest UK inflation for 30 years and a cost of living crisis, some people who pay for their energy usage by direct debt may not feel the 54% rise of the price cap until their next bill lands.
However, for the 4.5 million people using prepayment meters the impact of the 1 April hike is already being felt. They also face a higher annual price cap for average use of £2,017 rather than £1,971 for those who pay by monthly direct debit.
Prepayment meters “trap people in fuel poverty” by charging above-average rates, according to research by the charity Church Action on Poverty. Low-income households make up the majority of users and the huge hike has prompted fears that more people will be forced to choose between food and fuel as poorer families spend a higher proportion of their income on energy.
The government has come under fire in recent weeks for failing to do enough to support households about to be hammered by the increase. Analysis from the consultancy firm Cornwall Insight estimates the cap could be raised again later this year to £2,600.
The Guardian spoke to four people with prepayment meters on what the price rise means for them.
‘When the meter runs out, you try and live when the sun’s up’
Tim Hooper, 50, Norfolk
When Tim Hooper moved into a housing association property in Norfolk in 2019, it seemed like a new chapter after two years living in hostels. However, because he agreed a debt relief order while homeless, he was unable to secure an energy contract and must use a prepayment meter.
After the energy price cap hike, the 50-year-old says he now expects to spend roughly £32 a week of his monthly £325 universal credit on energy costs – almost 40% of his income after housing costs. Until this month he paid about £22 a week.
“I’m really quite frightened,” he says. “There are times previously when I’ve run out of credit on my meter and just had to sit in the dark and I’m worried that might be more frequent … You try to live when the sun’s up.”
It was “a real kick in the teeth” when the government removed the £20 [universal credit] uplift, says Hooper. “With the likes of the prime minister and the chancellor, they are so out of touch. It can’t be that they’re ignorant of what people on low incomes experience – it must be that they just don’t care.”
‘I thought I’d leave behind worrying about heating when I stopped being a student’
Emma Rehling, 32, Tower Hamlets
For Emma Rehling, who part-owns and part-rents a flat in Tower Hamlets, east London, gas prices have more than doubled. The 32-year-old, who lives alone and works in communications, says the amount she tops up her meter has surged from about £30 a month to £70, even after she has slightly reduced usage.
Because her block of flats has a communal boiler – which also services a local school and mosque – occupants are charged a commercial rate for their prepaid meter, making Rehling one of up to 500,000 people losing out on consumer protections like the price cap.
Her communal boiler rate rocketed in February by almost 250%, from 4.05p to 13.94 a kilowatt hour, documents seen by the Guardian show. Electricity for each flat is non-communal.
“It’s the little things, I thought I would leave behind worries about putting the heating on as a student, but I’m in my 30s still worrying,” she says. “I’m lucky as I live on my own, and it’s far worse for families. But also I don’t have anyone to fall back on.”
Rehling says the situation has led to anxiety about the future as it’s impossible to save for emergencies. “My whole salary is gone at the end of each month. It’s really depressing.”
‘I try and live on £1 for food a day, but there’s nothing left to cut back’
Ben, 47, Birmingham
Ben, a 47-year-old in Birmingham, has seen his electricity and gas rise by an estimated £250 a year, according to estimates from his energy supplier seen by the Guardian. His standing charge also increased to about 90p a day. “So I’m paying over £300 a year before I’ve even turned on the light,” he says.
The rises pile yet another cost of living expense on to his shoulders, which he says he will struggle to cover with his employment and support allowance disability benefit. “I’m trying to spend £1 for food a day,” he says, relying on anti-food waste apps and buying yellow-sticker reduced items.
Ben, who asked for his full name not to be disclosed because he does not want friends “to know how bad it is”, says the threat of further energy price cap rises later this year loom ominously.
“Once you’ve cut back everything you can – when you’re spending £1 on food a day and you’re no longer even taking the bus – how are you going to cut back again? There’s nothing left to cut.”
‘Everything’s going up, it feels like the walls are closing in’
Zoe Woodward, 30, south-east London
Anticipating the price rises to come, Zoe Woodward, a 30-year-old in south-east London working at a university, splashed out to savour her old rate. Her electricity rate is climbing 44% from 20.4p to 29.4p a kWh, documents show, and her gas rate is jumping 82% from 4.1p to 7.5p a kWh.
“We bought a bit of a reserve while the rates were still lower,” she says. Typically Woodward would top up £40 total for her electricity and gas meters – to cover up to two weeks of costs at the one-bedroom flat she rents with her partner – but she plugged in £120 before the rise to save money.
“We’re lucky we’re in a position to suddenly buy a load more energy,” she says. “But it’s a scary time, everywhere you look there are headlines about housing, bills, food and travel costs all going up, it can feel overwhelming.”
Woodward’s landlord is also increasing rent by £75 next month. “It feels like the walls are closing in. I’m not sure that you could print what I’d say to the prime minister or the chancellor. They could be doing so much more.”