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Households on prepayment meters will no longer pay more for their energy than those on direct debits, the chancellor is expected to announce this week.
The “prepayment meter penalty” will end in July, saving more than four million households around £45 a year at a cost of £200m.
It will be managed through changes to the government’s energy price guarantee and, after this ends in April 2024, energy regulator Ofgem will be asked for ways the change can be made permanent.
Ahead of his spring budget this week, Chancellor Jeremy Hunt said: “It is clearly unfair that those on prepayment meters pay more than others.
“We are going to put an end to that.”
Energy suppliers have said prepayment meters cost more to manage – supplying vouchers and collecting payments, for example – blaming this for the higher prices.
But most of the households on prepayment meters are vulnerable or low income, meaning the higher tariff and inability to spread the cost across the year are hitting those who can least afford to pay.
The chancellor will also be announcing a number of changes to benefits to get more of the sick, disabled and welfare claimants back into work.
The system used to assess eligibility for sickness benefits, for example, will be axed, allowing claimants to receive benefits after they return to work.
Over 50s will be targeted with more skills training, while parents will be given more help with childcare costs, which are among the most expensive in the world.
Mr Hunt will raise the maximum universal credit childcare allowance – which has been frozen at £646 a month per child for years – by several…
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