Energy News

British Gas Cut Prepayment Bills

Wednesday 24 June, 2008

By Dan Drage

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British Gas entered new territory this week by unveiling their first online tariff for prepayment customers.

The tariff, which aims to cut prepayment bills by £70 a year, is the first of its kind across the energy marketplace. Dubbed the ‘Click Pay As You Go Energy’ tariff, the product will be officially launched today on the British Gas (www.britishgas.co.uk) website.

A statement from British Gas claims the new tariff will reduce the average dual fuel prepayment bill from £1143 to £1073.

"Not all prepayment meter customers have access to the internet"

Prepayment meters are most widely used by low income households as a way of controlling their bills, as well as by students and those with holiday homes. If a customer has failed to settle their bill after a certain length of time, the energy company will often choose to fit a prepayment meter in their home.

The average household on a prepayment meter pays £137 more than those paying by direct debit, and more than £214 more than those paying online, according to Energywatch.

This move, although welcomed by price comparison sites and energy watchdogs, has been criticised by the National Housing Federation for not going far enough.

Chloe Hardy, head of campaigns at the National Housing Federation, had the following to say:

“This still leaves many of British Gas's poorest customers with staggeringly high bills. Not all prepayment meter customers have access to the internet.”

Chris Eagle, Commercial Manager at Energy Choices, views this as the first stage in an evolution:

“Prepayment meter customers have been hard done by for such a long period, it’s time the energy companies gave them a break”

He continues:

“Hopefully the remaining five of the big six suppliers will now follow suit and all offer a cheaper, online tariff to prepayment meter customers.”