London Daily

Focus on the big picture.
Saturday, Aug 08, 2026

Energy firms face investigation over prepayment meters by regulator

Energy firms face investigation over prepayment meters by regulator

Energy firms are to be investigated by the industry regulator following a sharp rise in the number of households being forced onto prepayment meters.

The regulator, Ofgem, is also warning firms it will take legal action if they are not taking proper due care of vulnerable households.

On Sunday, the government said suppliers should stop forcing households onto prepayment meters.

Ofgem is also considering cheaper social tariffs for some on low incomes.

It says these discounted energy bills could be a long-term option to tackle unaffordable bills.


'Not acceptable'


Pressure has been mounting on energy suppliers to stop switching people who are struggling to pay their bills onto prepayment meters.

Citizens Advice estimates that 3.2 million people in Britain ran out of credit on their prepayment meter last year, the equivalent of one every 10 seconds.

On Sunday, Business Secretary Grant Shapps warned he would "name and shame" suppliers who were doing "nowhere near enough" for vulnerable customers.

In a speech at the Institute for Government later, Ofgem boss Jonathan Brearley will say he is "concerned" about the sharp growth in households being switched to prepayment meters, "sometimes without their even knowing about it".

"The numbers of forced installation of prepayment meters is extremely high. It is simply not acceptable that vulnerable customers are left in the dark and cold in winter."

Mr Brearley will announce a review that will focus "specifically on self-disconnections, remote switching and forced installations and, the checks and balances companies have around any decision to put a customer on a prepayment meter".

"If we find that they have not taken due care in this process, we will take further legal action against them," he will say.

Ofgem is calling for suppliers to stop forced installations of prepayment meters unless all options have been exhausted, although the regulator does not have the legal power to completely ban these actions.


Why is this allowed and what can you do?


*  Before smart meters existed, energy firms would have to get a warrant to enter your home and physically install a prepayment meter

*  Now, smart meters enable energy firms to switch customers from direct debit payments to a prepayment meter system remotely

*  Ofgem rules state that energy suppliers must have effective checks and balances in place when switching the mode of a smart meter

*  The regulator advises customers with concerns to speak to their supplier. Under Ofgem rules they must offer payment plans you can afford and you can ask for emergency credit if you use a prepay meter and can't top up

*  Breathing Space, sometimes called the Debt Respite Scheme, is a free government scheme that could give you up to 60 days' space from creditors to set up a debt solution. Step Change debt charity can help you to apply

*  Citizens Advice offers this guide: Stop your energy supplier moving you to prepayment

Social tariffs


In his speech. Mr Brearley will also say that cheaper social tariffs for vulnerable households should be considered as a long-term option for tackling unaffordable bills.

"We are calling for a serious assessment of a social tariff," Mr Brearley will say. "If it can be made to work, this could tackle the root cause of this issue and the distress that many customers are in this winter."

In theory, the cost of providing such a discount would either be paid for by suppliers - by increasing the bills of everyone else - or by the government through taxation.

If adopted, it would mark a significant shake-up in the way millions of households are charged for energy.

In other social tariff schemes, people qualify if they receive certain means-tested benefits.

For example, some people receive cheaper broadband deals. However, there has been some criticism of providers for not making customers aware of these tariffs, leading to very low take-up rates.

Social tariffs were also used in the energy sector before people were protected by a price cap - a limit on the price of each unit of energy charged to domestic customers.

Some energy companies bosses have signalled they would be open to social tariffs alongside a reformed price cap.

The government set a cap on the unit price of gas and electricity for households, which means the typical household currently pays £2,500 a year. This will rise to £3,000 a year when the cap is reset in April.

However, the universal £400 discount, which is being paid in monthly instalments over this winter is not expected to be continued.

Cost-of-living payments have provided additional support for more vulnerable households, or those with higher energy costs, since the summer.


Although there have been forecasts of typical energy bills falling below the government guarantee later this year, the cost would still be double that of last winter.

Experts have also said there is little chance of energy prices dropping back to pre-Covid levels.

Earlier in January, a coalition of nearly 100 charities wrote to Chancellor Jeremy Hunt urging him to start the process of introducing a social tariff for April 2024 when government support is scheduled to end.

"While the government was able to offer unprecedented protection for households and businesses from high energy prices, many people in poverty and with higher energy needs - for example, those relying on medical equipment like dialysis - have still struggled with affording to adequately heat and power their homes," the letter said.


Watch: A minute of money-saving tips with the BBC's Matt Taylor and Colletta Smith


Newsletter

Related Articles

0:00
0:00
Close
Australian Crew Evacuates Seriously Ill American From Antarctica in Midwinter Darkness
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Welsh First Minister Raises Independence With UK Prime Minister in First High-Level Call
UK Maintains Severe Terror Threat Level as Prevent Report Highlights Online Radicalization
YouGov Poll Shows Labour Favourability Improves as Reform UK and Greens Lose Ground
Brexit Campaigner Arron Banks Admits Hiring Private Investigator to Examine Journalist
Robert Jenrick Leaves Conservatives for Reform UK in Major Parliamentary Defection
July 2026 Was England and Wales’ Driest Month on Record, Met Office Says
UK Government Considers Public Inquiry Into Jeffrey Epstein’s UK Connections
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
UK Drought Cuts Harvests and Raises Food-Security Fears
UFO: Pentagon Releases Video of Unidentified Object Tracked Over Middle East
US Health Secretary: “I’m Not Afraid of Germs — I Used to Snort Cocaine Off Toilet Seats”
Ukraine Tells Senate Republicans Its Drone War Offers a Blueprint for America
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Trump Keeps Hegseth at Pentagon While Leaving Door Open for DeSantis
UK Clears Paramount’s Warner Bros. Discovery Deal, but US Trial Looms
UK Prosecutors Add 38 Charges Against Andrew and Tristan Tate
Taiwan’s President Joins Wartime Command Drill as China Pressure Grows
Saudi Arabia, Turkey and Pakistan Sign Mutual-Defence Pact
Government Orders Review of Prison Release Rules After Concerns Over Grooming Gang Offenders
Rail Disruption Continues Across North-West England Amid Infrastructure Problems and Engineering Closures
UK Tax Authority Proposes Broad Changes to Rules Governing Company Distributions
UK Government Moves to Protect Standing Areas Outside Pubs From Local Restrictions
Extreme Right-Wing Referrals Under UK Prevent Programme Rise 42 Percent
EU Citizens in UK Warned That Some Residency Rights May Have Been Granted in Error
Every Monitored Body of Water in England Fails Chemical Purity Standards, Government Data Shows
UK Scientists Create First Artificial Intelligence-Designed Viruses
England Orders Primary Schools to Identify Children at Risk of Becoming Disengaged From Education or Work
Government Moves to Close Prison Release Loophole Amid Concern Over Grooming Gang Offenders
UK Economy Shows Modest Growth Despite Energy Volatility and Global Supply Pressures
Police and Prosecutors Failed to Stop Sex Offender Who Later Murdered Two Women, Review Finds
Millions in England Face Longer Mental Health Waiting Times as NHS Providers Cut Spending
Met Office Warns of Heatwave as Temperatures Across England and Wales Could Reach 36 Degrees Celsius
HMRC’s 2029 Tax Shift Could Overlap Old and New Self-Assessment Bills
Thetford Disorder Prompts Expanded Police Powers Amid Asylum-Housing Protests
Cambridge Faces Calls for Independent Review of Jason Arday Appointment
Scotland’s ‘Cock of the North’ Woodland Is Being Felled After Wind Damage
Reform UK and Greens Unite Against Vast Solar Plans for Kent Marshland
New Zealand Draws Wealthy Americans With Revamped Investor Visa
Senate Panel Votes to Hold Anthony Fauci in Contempt After Fifth Amendment Testimony
Cambridge Professor Jason Arday Resigns as University Opens Inquiry Into His Credentials
Manchester Power Failure Disrupts Trains Across North West Into Friday
UK Fashion and Tourism Sectors Prepare for Strong Summer and Autumn Activity
London Residents Seek Appeal Against Approval for Chinese Super-Embassy Development
UK Environment Officials Issue Biosecurity Alert Over Rising Bluetongue Cases in Livestock
UK Charity Regulator Opens Investigations Into Donations Linked to Israeli Settlements
Gatwick Expansion and Chinese Embassy Plans Highlight Growing UK Infrastructure Disputes
UK Agriculture Authorities Warn of Rising Bluetongue Virus Cases Among Sheep Farms
×