Most of the households on prepayment meters are vulnerable or low income - those who can least afford to pay the higher costs.
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.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.
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