People who use prepayment meters are often vulnerable or on low incomes, but they end up paying more because energy companies pass on the cost of managing the meters.
The government now thinks this is unfair and has decided to cover the extra charges these households would have paid through a £200m scheme called the Energy Price Guarantee.
The regulator Ofgem will also review how to permanently end this "prepayment penalty" when the government support ends in April 2024. This move will benefit those who have been struggling to pay their energy bills and it's part of the government's efforts to address the issue of energy affordability.
Prepayment meters have been in the news recently, as it was revealed that some energy companies had been forcing vulnerable people to have them fitted. Ofgem is currently reviewing the use of prepayment meters, and energy companies have been told to compensate customers whose homes were wrongly fitted with them.
This latest announcement by the government means that prepayment meter customers will no longer be charged more for their energy going forward. This is good news for some of the most vulnerable people in our society, who will now be able to save some money on their energy bills.
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