In 2011 Energy UK and Citizen’s Advice (then Consumer Focus) developed five key prepayment principles to raise standards of service for customers paying for their energy using a prepayment meter. The original principles were designed to improve the identification of any customer vulnerability and the quality of communication with prepayment customers.
In the last five years the industry has undergone huge change and the time has come to refresh the principles. The updated principles, developed in consultation with Citizen’s Advice, are designed to respond to two important trends in the energy sector: the increasing number of prepayment meters installed and the growing number of suppliers active in the market.
The nature of debt and disconnection in the UK energy retail market has changed beyond recognition. In 2003 there were around 16,000 disconnections of domestic customers for debt in the UK. In 2014 - the most recent year for which published data exists - there were just over 200. But as work by Citizen’s Advice has shown, one of the main challenges with regard to prepayment meters is providing support to those at risk of self-disconnection. These are customers who have too little money to top-up their meters and without support go off-supply not out of choice but out of desperation.
The improved Energy UK prepayment principles commit signatories to monitoring prepayment accounts after installation and on an ongoing basis to ensure customers can successfully work their meters. The new principles also commit to providing support and assistance for customers at risk of self-disconnection including reviewing the debt recovery rate for those in arrears and signposting customers to further financial support and debt advice.
Many of the principles go above and beyond what is set out in regulation, while others clarify what is already required in regulation. This provides stakeholders and frontline advisers working with customers a clearer understanding of what prepayment customers can expect from suppliers.
In 2011 when the original prepayment principles were launched smaller suppliers accounted for around one per cent of all customer accounts. That figure is around 15 per cent today. That’s why it’s so important that 12 suppliers have signed up to the new Energy UK prepayment principles at the time of launch. We hope that more suppliers will sign up in future.
The launch of these new principles is an important step in the journey to improve consumer outcomes in the energy sector. It means that during this winter all signatories of the updated principles will be implementing the changes necessary to comply with the commitments they have made. Energy UK remains fully committed to the continuing improvement of outcomes for all energy customers.