Responding to Ofgem's proposals on the energy market, the National Housing Federation (NHF) said the move to make pricing "cost reflective" could have disastrous consequences for Britain's six million prepay customers.

Bob Wilson, Assistant Director at the NHF said: "This could be another kick in teeth for millions of prepay customers, who have finally seen prices coming down after years of being ripped off by the energy giants.

"These proposals will give the big six the perfect excuse to increase their prepay charges again and could result in dramatically higher prices.


"This makes a mockery of Ofgem's claims that it wants to protect vulnerable customers. Energy companies should absorb the extra costs of maintaining meters rather than passing them on to their poorest customers.

"Prepay customers should not pay a penny more than people who pay their bills quarterly and should no longer be discriminated against."

Gas prepay customers are still charged £50m in excess charges for their energy every year, compared to those who pay via quarterly bills.

While E.ON, Scottish Power and Npower have dropped the prepayment meter premium, British Gas, EDF and SSE are still charging their 1.5m prepayment meter gas customers a premium.

According to research by the Federation, Britain's prepay customers have an average household income of just £16,000 a year, with many coming from vulnerable backgrounds.

(CD/JM)