Government Urged To Extend Energy Voucher "Lifetimes" With £240m Expected To Go Unclaimed
£240m worth of prepayment meter (PPM) vouchers to help with rising energy bills are set to go unclaimed. (Alamy)
The government is under pressure to tackle the issue of unclaimed prepayment meter (PPM) vouchers issued through its Energy Bill Support Scheme (EBSS) as experts warn millions of vouchers are predicted to go unclaimed with the money set to be returned to the Treasury.
PPMs operate on a pay-as-you-go basis and are usually topped up by buying credit with a key or a smart card. When a PPM’s credit is used up, a household is left without heating and electricity.
Customers using the meters have received a monthly £66 voucher since October towards their energy bills as part of the government’s EBSS.
The government has also capped the average yearly energy bill at £2,500 through its Energy Price Guarantee (EPG); without the intervention, they would have risen to £3,549 in October and £4,279 in January.
However, the average yearly bill is still now 120% higher compared to 18 months ago, and is set to rise again in April to £3,000.
Data from the department for business, energy and industrial strategy (BEIS) shows 2m vouchers totalling £125m have so far gone unclaimed, with the figure set to reach £240m by the time the scheme ends on 30 June, according to National Energy Action (NEA).
Experts believe a number of factors are driving the problem, including: incorrect contact details on accounts, postal strikes, reluctance to open post due to fearing bills, lack of access to printers, having to travel long distances for vouchers, and customers being unaware they needed to claim them.
Moneysaving expert and personal finance campaigner Martin Lewis told PoliticsHome the £240m figure is “a desperate but totally predictable statistic”, and urged the government to intervene.
“The state subcontracted delivery of a vital cost of living support mechanism to energy firms, and hasn't pressured them enough to ensure those most in need get the support," Lewis said.
"I've been yelling from the rooftops for months for people to redeem their vouchers, yet it was always going to be tricky – with such an imperfect mechanism.
“There are many who still say they never got them, others who've had trouble redeeming. And equally many with mental capacity or health issues that make these things tough for them.
“The real frustration is that it tends to be that most of the poorest in society, in the most need, are on prepayment meters.
“We need to extend the voucher's lifetimes, and the government needs to work with firms to ensure those who haven't redeemed are personally contacted to ensure they understand what they're missing out on."
Households on low incomes or in poverty are more likely to be on PPMs because energy companies can gain court warrants to forcibly install them if a household falls behind on its energy bills.
New data from the Office for National Statistics (ONS) on Monday revealed PPM customers are twice as likely to be in debt compared to non-PPM customers.
Ed Miliband, shadow climate and net zero secretary, told PoliticsHome the government needed to take “urgent action” to tackle the issue of unclaimed vouchers.
"This is further proof that the government has failed to properly roll out the support that families on prepayment meters need to cope with rising energy bills,” said Miliband.
“The government must take urgent action to boost uptake and support all eligible families.
“And we must end the situation where those on prepayment meters are forced to pay more for the same energy as other households.”
PPM customers often pay more for the energy due to standing charges accruing on their accounts even if they do not top them up, and due to lack of access to fixed tariff deals available for non-PPM customers.
Senior Labour MP Hilary Benn, a critic of PPMs who has argued energy companies should be banned from cutting of energy as water suppliers were in the 1990s, told PoliticsHome: “In the sixth richest country in the world, we need to bring an end to a situation where people are sitting in the cold and the dark because they simply do not have enough money to top up their prepayment meter.”
NEA director of policy Peter Smith described the amount of unclaimed vouchers as “hugely damaging”.
“Before the Energy Bills Support Scheme even started, we cautioned the government that there would be legacy energy prepayment meter customers who would have difficulties accessing it,” said Smith.
“Given that prepayment meter customers are more likely to be on a lower income, this is hugely damaging."
He added: “The government needs to have in place contingency measures to get equivalent support to those who are not able to access the scheme.”
Last week energy watchdog Ofgem suspended all PPM installations for six weeks after it emerged British Gas were breaking into the homes of vulnerable people to install meters despite those households being exempt.
Responding to the issue of unclaimed vouchers, a government spokesperson told PoliticsHome: “We know this is a difficult time for families, which is why the government has covered around half of the typical household’s energy bill this winter.
“Suppliers are required to make every effort to ensure all their customers receive the payments due to them under the Energy Bills Support Scheme.
"At least three attempts must be made to reach each customer.”
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