Energy Bill Support Scheme: thousands missing out on £400 prepayment energy vouchers

Help worth £130 million yet to be claimed by homes with prepayment meters.

Energy bills have been a big worry for all of us over the last year.

The rocking price of energy on the wholesale markets pushed up our bills to record highs, to the point that the Government felt compelled to step in with its own Energy Price Guarantee, which would undercut the protection already offered through the Energy Price Cap.

With the cap dropping down to a little over £2,000 last month, there is a little respite for households across the country over the cost of our gas and electricity.

However, it has emerged that thousands of households are still missing out on valuable help towards their energy bills worth hundreds of pounds.

Getting help with our energy bills

Last year, the Government introduced the Energy Bill Support Scheme.

The idea was that all households would get £400 from the state to help pay our energy bills during the winter months, when usage is at its highest courtesy of the colder temperatures.

The money was split into six monthly payments, running from October to April, with all of us entitled to £66 or £67 in each of those months.

For households that pay their bills by direct debit, the process was incredibly simple ‒ the money was simply paid directly to the supplier.

In other words, we didn’t have to do anything, our bills were just automatically discounted over those six months.

However, that wasn’t going to work for people on traditional energy meters.

With these, you have to put the money onto the meter first before you can use it, so instead these households were sent monthly vouchers.

The idea is that they could use these vouchers to top up their meters during the cold, winter months and save a few quid.

The trouble is that, for an awful lot of households, that hasn’t been happening.

Time is running out

According to new data from the Department for Energy Security and Net Zero, only around 83% of the vouchers have been used.

As a result, there is around £130 million of Government support which is there to be claimed, but is reliant on these households actually taking the vouchers to their local Post Office or shop and using them to top up their meter.

In a bid to boost take-up, the Government is launching an information campaign, along with the likes of Which?, National Energy Action and Fuel Bank Foundation.

The vouchers need to be used by the end of June, so time is running out.

There are certain areas which have had a particularly poor take-up. London for example has had the lowest redemption rate throughout, with around 650,000 vouchers still unused.

That’s around one in three going unclaimed.

The South East and Scotland have also been slow to take advantage, with around a quarter of vouchers yet to be claimed.

The prepayment premium

The nature of prepayment meters has inevitably made it rather more difficult to get help into the hands of relevant households.

The system relies on those households being able to take direct action to make the most of the support on offer, which is simply not always possible.

It’s yet another example of the unfair nature of prepayment meters, and the way that they punish households lumbered with them.

We already know that this winter saw some households on prepayment meters essentially disconnect themselves, as a result of concerns over how they would pay for their energy use.

When you pay your bills by direct debit, you at least have the certainty of paying largely the same amount each month.

Your supplier calculates how much you’re likely to spend over a year, and then divides that into 12 equal payments, meaning you can budget around that consistent payment.

It doesn’t work like that with prepayment meters. As you have to top the meter up first, the amount you spend on energy is less consistent ‒ you will inevitably be using more energy during the winter, so having to spend more topping it up in those months.

Those higher costs were simply beyond some households, who were unable to top up their meters and so went cold.

While new rules have been introduced which make it a little tougher for suppliers to forcibly fit prepayment meters, the reality is that doing so is enormously costly for the families impacted.