Citizens Advice Scotland Warns Utility Firm Bills Can Breed Poverty

31 August 2016, 05:41

Utility companies are breeding poverty by charging poorer people more for their services than better-off customers, Citizens Advice Scotland (CAS) has found.

More than a quarter (27%) of poor people use costly pre-payment energy meters, most of them racking up bills of over £100 a month, compared with 12% of middle earners and 1% of high earners.

Nearly half (47%) use more expensive pay-as-you-go phones compared with 31% of middle earners and 9% of high-income earners.

CAS also found poorer people often take out credit or loans without understanding the full costs involved and so end up repaying much more than they can afford. Others said they had no home contents insurance as they find it unaffordable.

"Many charities have published evidence in recent years which shows that too many people in Scotland struggle on low incomes,'' CAS spokesman Patrick Hogan said.

"Our new research today shows that many individuals' financial situations are made even worse because poverty levels limit their choices when it comes to accessing consumer services.

"So, if you are poor in Scotland today you pay more for basic services, and so become even poorer. This cannot be right and needs to be addressed.

"In our report today we make a number of recommendations about how to address this problem.

"We pledge that we will work together with those who supply essential services to persuade them to bring down costs and offer better deals to those on low incomes.

"We will also raise awareness of cost traps and the importance of making informed consumer choice.

"The market must offer better value for consumers of all income levels. Poverty should not breed even more poverty.''