NEA: Poor pay £1000 more for basic services
Monday, 05, Mar 2007 12:00
Poor families have to pay on average a £1000 annual poverty premium for the most essential goods and services such as gas, electricity and insurance, according to a new report published today.
National Energy Action (NEA) – the leading fuel poverty charity – is backing the report The Poverty Premium, issued by Save the Children and the Family Welfare Association to bring to Government attention the plight of millions of poor households across the country suffering from higher tariffs for essential services, like heating and light.
The report shows that low-income families pay on average:
• 10% more on gas bills paid through prepayment meters rather than by direct debit.
• 8% more on electricity bills paid through prepayment meters rather than by direct debit.
Poor families are forced to pay more because of how they pay for goods and services – they are more likely to opt for prepay options, which make budgeting easier, and less likely to be able to afford to pay for an item in full or use more favourable direct debit tariffs.
NEA, Save the Children and the Family Welfare Association are calling on gas and electricity providers to match prepayment meter rates with direct debit rates.
Currently, none of the ‘Big Six’ energy providers have yet equalised their prepayment meters for gas AND electricity. (Please see the table below)
The Government looks likely to miss its target of ending fuel poverty for all vulnerable households by 2010 unless drastic measures to push for the equalisation of prepayment meters, plus income maximisation for poor families, are taken.
The report also calls for the Government to tackle the fundamental problem of income poverty by investing the necessary £4.5 billion to meet the 2010 target of halving child poverty in the UK.
William Gillis, Chief Executive of NEA, said: “This report really helps to illustrate how the poor are penalised. We believe that vulnerable householders should not have to pay more for their electricity or gas just because of their financial predicament. It is a scandal in this modern era that there are still 3 million people in England who cannot afford to heat their cold, damp homes to a safe and comfortable standard.”
Colette Marshall, UK Director of Save the Children, said: “It is a matter of gross injustice that the families who are struggling most to get by from week to week are being forced to pay more for essential things like heating their homes. Children in these families are missing out on the best possible start in life, because their parents are being unfairly charged. As part of the End Child Poverty campaign, we demand that companies and Government must work together to stop this deeply unfair financial punishment of families.”
Helen Dent, Chief Executive of the Family Welfare Association, said: “The Government expends significant amounts of time and energy exploring the most effective ways to get more money into the pockets of low income families. Yet they spend very little time addressing the unequal way in which it comes out of those families’ pockets. This has to change, and the Government must commit to tackling this poverty premium if it is to meet its target of ending child poverty.”
- Ends -
COMPARISON: DIRECT DEBIT, STANDARD CREDIT AND PREPAYMENT METER TARIFFS
GAS - Medium User Scottish Power EDF BG Powergen npower (Sept 06) SSE (Jan 07)
Average direct debit £591 £625 £634 £625 £604 £573
Average standard credit £622 £641 £707 £644 £628 £607
Average PPM £629 £650 £707 £710 £687 £659
Electricity - Medium User Scottish Power EDF BG Powergen npower (Sept 06) SSE (Jan 07)
Average direct debit £332 £349 £409 £381 £377 £354
Average standard credit £379 £357 £428 £392 £400 £374
Average PPM £379 £357 £452 £392 £437 £374
Table courtesy of energywatch
The highlighted prices are instances of a supplier having equalised their PPM tariff with the standard credit rate. On March 12, British Gas will introduce prepayment equalisation among its vulnerable dual fuel customers.
Notes to Editors
• To receive a PDF copy of the report, The Poverty Premium: The financial penalties faced by poor households, please contact Sophie Elmhirst at Save the Children on 020 7012 6403.
• The authors of the report are Jason Strelitz, Poverty Adviser at Save the Children and Claire Kober, Head of Policy and Campaigns at the Family Welfare Association.
• To interview spokespeople from either Save the Children or the Family Welfare Association, please contact Sophie Elmhirst on 020 7012 6403.
• To interview spokespeople for NEA call Jenny Saunders on 01912615677 or 07703346666 (out of hours)
• For more information on the campaigns of Save the Children, the Family Welfare Association, or NEA, go to www.savethechildren.org.uk/endchildpoverty
• www.fwa.org.uk
• and www.nea.org.uk
• Save the Children, the Family Welfare Association and NEA are part of the campaign to End Child Poverty, go to www.endchildpoverty.org.uk to find out more.