Leading North-east fuel efficiency advice provider, Scarf, has welcomed proposals to impose a price cap for all households using pre-payment meters.
The Competition and Markets Authority estimates that the price controls would lower bills by £300m across the UK, the equivalent of about £90 per household.
Further proposals include the improvement of price comparison services, ending the restriction on suppliers to offer only four tariffs and ending rollover contracts.
Thane Lawrie, Chief Executive of Scarf, said: “Fuel poverty is a real issue in the north east Scotland and today’s news is a big step in the efforts to tackle it. While pre-payment meters are designed to ensure householders stay free of fuel debt, the expensive tariffs can stretch a household’s income too far.”
Pay-as-you-go gas and electricity, paid for up front using pre-payment meters are typically charged at a higher rate than tariffs available on the open market.
The meters are usually installed when a household finds itself in debt with the fuel supplier - often low-income customers vulnerable to fuel poverty.
A household is in fuel poverty if, in order to maintain a satisfactory heating regime, it would be required to spend more than 10 per cent of its income on all household fuel use.
Extreme fuel poverty is defined as spending 20 per cent or more.
Garry Donald, co-ordinator of Scarf’s Home Energy Advice Team, added: “We see instances where households rely on further borrowing to pay for the high-cost standard tariffs enforced by pre-payment meters, which can trap people in fuel poverty. Customers who struggle to pay can end up paying the most, and any move to address that is a positive one.”
The Home Energy Advice Team (HEAT) offers free and impartial advice - funded and supported by local authorities – on fuel bills, fuel debt and fuel switching.
For advice or to arrange a free home visit householders can call freephone 0808 129 0888.