Energy companies will be prevented from charging customers additional fees if they use PAYG meters

Energy companies will be prevented from charging their customers more for using prepaid meters in reforms announcing Jeremy Hunt’s budget.

The Chancellor will end the so-called “prepayment bonus”, which affects more than four million households with usage-based meters, from July.

This will save millions of households £45 a year on their energy bills, according to the Treasury. Households that use the meters currently pay more on average than direct debit customers because the companies that manage the meters pass the costs on to the users.

The Treasury estimates the change will cost taxpayers £200m.

Describing the system as “clearly unfair”, Mr Hunt added: “We will put an end to this.

The Chancellor will end the so-called “prepayment bonus”, which affects more than four million households with usage-based meters, from July

Households that use the meters currently pay more on average than direct debit customers because the companies that manage the meters pass the costs on to the users

“As of July, four million households will pay no more than direct debits. We have already almost halved energy bills this winter and this latest reform proves once again that we are always on the side of families.”

Prepaid meters came under scrutiny earlier this year when it was revealed that energy giant British Gas was sending debt collectors to “break into homes” and force pay-as-you-go meters on “vulnerable” customers.

Energy companies can obtain court orders giving them the legal right to enter people’s homes and install prepaid meters when customers have not paid their bills. The customer then have to refuel to keep getting gas and otherwise risk cutting off the heating.

As a result, firms were temporarily banned from installing warrant meters, but the order expires at the end of this month.

Energy Secretary Grant Shapps said: “While the measures I have been pushing for have resulted in forced installations being suspended, no warrants being waved through and Ofgem stepping up its screenings, our changes will ensure families are not penalized just for how they heat their house.”

Elsewhere in the budget, the Chancellor is expected to scrap a proposed £500 increase in energy bills that was due to come into effect next month.

For the average household, bills could now remain around £2,500, rather than rising to £3,000 as previously announced.

Source: | This article originally belongs to Dailymail.co.uk