Ahead of Wednesday’s (15 March) Spring Budget announcement, OVO Energy has called on the UK Government to abolish its poverty penalty for pay-as-you-go customers.
Prepayment meter customers have historically paid less for their energy than those paying in arrears, but more than those paying by direct debit. To ensure that prepayment meters are the cheapest way to pay for energy, OVO also called for Ofgem to lower the unit rates under the lates Price Cap.
OVO first called for poverty penalty to be scrapped in its 10-Point Plan last summer.
Research release by Citizens Advice earlier this year revealed that 3.2 million people were cut off from their energy supply due to being unable to top up their prepayment meter in 2022.
Of those 3.5 million, 19% spent a minimum of 24 hours without gas or electricity.
OVO have also encouraged the implementation of an energy social tariff by 2024, as suggested by ninety-five charities and non-profit organisations in an open letter to the chancellor Jeremy Hunt MP at the beginning of this year.
OVO’s recommendation to the government comes just as Ofgem and Citizens Advice launched a national call for evidence on pre-payment meters, asking for input from customers that either have had prepayment meters installed to recover unpaid bills or those that actively choose to use pay-as-you-go to manage their budgets