Government energy bill subsidies of up to £400 during the winter do not reach many households using prepaid meters, according to data from a payments company.
Families with prepaid energy meters are entitled to vouchers giving them monthly discounts, but only half the expected number have been used so far, according to PayPoint, which handles additional payments at stores across the UK.
Discounts on energy bills were due to start on 1 October for everyone in the UK, regardless of family size, with a reduction of £66 or £67 per month between October and March.
Energy companies will automatically apply the reductions to household bills that pay by monthly bills, but users of many prepaid meters, who are generally poorer, must claim the reductions.
PayPoint expected to process 800,000 vouchers in October, with a total value of £52.8 million. However, the company said only £27m had been recovered, according to figures first reported by BBC News.
The Labor Party said the government should end the “unfair penalty premium for prepaid meter users”.
Alan Whitehead, Shadow Energy Secretary, said: “Government has been warned countless times of difficulties in reaching prepaid meter customers through coupons when this scheme was designed. However, they refused to heed these warnings and it is not surprising that millions of households have not recovered After subsidizing rising energy costs.
“Because prepaid meter customers are often lower-income and at greater risk of fuel poverty, the government must urgently work with energy companies to raise awareness and encourage adoption of the system before these coupons run out.”
Under the scheme, families with a traditional “non-smart” prepaid counter are meant to receive vouchers in the first week of every month by text, email or mail. Customers should then be able to redeem them at post offices and PayPoint locations in shops and newsagents.
Rishi Sunak announced the government’s energy bills support scheme as an advisor in February and it was extended in May as the energy crisis worsened after the Russian invasion of Ukraine. Then Liz Truss announced a separate, broader promise to reduce the average annual household energy bill at £2,500 a year for two years, although that was scaled back to six months by the current chancellor, Jeremy Hunt.
Energy companies insist on prepaid meters for customers who think they may run the risk of not paying. During the energy crisis, the number of prepaid meters in use rose. Ofgem data analyzed by comparison site Uswitch shows that 7.38 million prepaid counters were used in the first quarter of 2022, up from 7.35 million in the last three months of last year. Further increases in the number of prepaid meters are expected during the winter season as bills rise, even after the implementation of government subsidies.
Prepaid meter users already pay more than many other homes for the same service due to the standing fee of up to £50 per year which applies whether or not the household uses energy.
A Department for Business spokesperson said: “The government has acted quickly to introduce the Energy Bills Support Scheme, to help a wide range of households struggling with energy bills this winter, including £1,200 direct payments to vulnerable households.
“We encourage customers to apply their credit to their meter as soon as possible so they can take advantage of the scheme, which comes on top of the Energy Price Guarantee which is saving the average household around £700 this winter.”