Utilita sees 800% jump in support credit payments

Prepayment meter (PPM) specialist energy supplier Utilita has seen an almost 800% increase in the amount of additional support credit (ASC) it provides to customers over the past three years.

Figures provided to Utility Week by the retailer reveal that £6.85 million worth of ASC was provided to its smart prepay customers in 2020. The figure almost doubled to £12.05 million in 2021 and climbed at a similar rate to £22.55 million in 2022.

Yet the cost of living crisis has resulted in another massive spike in payments made to customers, with the figure for 2023 expected to be close to £60 million.

Commenting on the stats, Utilita’s non-executive chair and former chair of the government’s fuel poverty advisory group, Derek Lickorish said: “Worryingly, this data points to only one conclusion – households are running on empty, their financial resilience destroyed – by Covid, and latterly the cost-of-living crisis. As a result, Christmas will be terrible for many people and having to live in a cold and damp home.

“Given the undeniable link between suffering poor heath in cold, damp homes and excess winter deaths, the blast of widespread colder weather to hit the UK over the past few days has only served to underline the short-sighted nature of the government’s failure to announce direct energy bill support in last week’s Autumn Statement.”

Lickorish said that the current level of support being provided by government “is wholly inadequate”.

He added: “By doing nothing and reducing the amount of money people must have to keep their home to a healthy heat, you will drive extra costs elsewhere – such as through increased admissions to our brilliant but overstretched NHS – and create additional poorer social outcomes for children.

“Far better to cure the fundamental problem for this winter by providing targeted support, instead of spending more dealing with the consequences of inaction later. It does beg the question: how bad does it have to get for this government to act?”

Utilita allows customers to set their own recovery rate on ASC and this can be as low as 5%. The company said while the vast majority pay ASC back, in terms of overall debt, across all accounts, Utilita has a write off strategy across the business and cancels debt worth tens of millions of pounds every year.

Responding to Lickorish’s comments, a government spokesperson said it spent £40 billion paying around half a typical household’s energy bill last winter.

They added: “Energy prices are falling, and our Energy Price Guarantee remains in place to protect people until April next year. We’re also continuing to support the most vulnerable, with three million households expected to benefit from the £150 Warm Home Discount, £900 for those on means-tested benefits, and an extra £150 for disabled people.

“We continue to keep all options under review for those most in need.”

The figures come on National Energy Action’s (NEA) Fuel Poverty Awareness Day (30 November).

Ahead of the event the charity has revealed that when the next price cap comes into effect in January, 6.5 million UK households will be in fuel poverty – up 2 million from when the crisis began in October 2021 and 200,000 from the current figure.

Polling by YouGov which was commissioned by NEA has found 41% of PPM customers have found themselves without credit on their meter and unable to access any energy in the last three months.

Additionally in the last three months:

• 43% of adults have gone to bed early to stay warm
• 13% have used appliances like ovens to stay warm
• 23% have left curtains closed all day or put newspaper over windows

The charity has also revealed that its advisers have dealt with a case where one woman shaved her hair off as she couldn’t afford the energy to wash it regularly. Others meanwhile have told how they have cold water bucket showers to save using electric showers.

National Energy Action chief executive Adam Scorer said: “Let’s make no mistake. These are not ‘coping tactics’. No one should have to shower with cold water or disconnect from energy entirely. For two years we’ve been warning that people’s lives are in danger from sky-high energy prices and the situation is only getting worse from January.”

“People are trapped in a vicious cycle of hospital admission, discharge and readmission. For thousands it means premature death. The failure to provide additional support in last week’s Autumn Statement means the poorest households are living in cold and unsafe homes this winter, with grave consequences for people’s health and well-being,” he added.