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Highlights:
- Rising installations of prepaid meters have raised concerns that cash-strapped households may plunge into darkness in winter.
- These meters disconnect by themselves when consumers are unable to top up.
Amid the cost-of-living crisis and fears of bigger energy bills this winter due to the higher prices, there is one more concern that Brits are looking at - prepaid meters. These meters, which disconnect themselves when customers cannot top-up, are being installed in record numbers now.
According to the price comparison website Uswitch, the trend is startling. This is a concern, especially at a time when consumers are already struggling with soaring bills ahead of the winter season.
In its analysis, the comparison website used data from UK’s energy regulator Ofgem and found that about 7.38 million UK homes were using prepaid meters in the first quarter of 2022, about 60,000 more than the 7.35 million in the previous quarter.
Image source: © Fluffthecat | Megapixl.com
Based on the trend, Uswitch expects that about 10,000 homes are being pushed to get prepaid meters installed every month, which is likely to continue this winter. It added that those most likely to switch to these meters were also the least able to afford the high energy bills.
This would mean that if the consumers fail to top up their meters, they could risk spending their nights in darkness. Not just that, the prepaid meters are costlier, roughly £50 more annually compared with an equivalent direct debit customer.
Amid this, Kalkine Media® deeps dive into some of the London-listed stocks and their performance.
National Grid Plc (LON: NG.)
The FTSE 100 constituent is among the UK’s leading energy utility providers. It distributes electricity and gas to consumers and holds a market cap of £34,405.57 million as of 26 October 2022. With a 12-month return of 2.71% and a year-to-date (YTD) return of –11.53%, shares of the company were trading at GBX 937.80. NG. shares were down 0.23% as of 10:57 am GMT+1 on Wednesday.
Centrica Plc (LON: CNA)
Another FTSE 100 constituent is Centrica, which enjoys a market cap of £4,046.78 million as of 26 October. With the Earnings Per Share of 0.21, the stock has given a 12-month return of 17.12%, while the YTD return is in the negative territory at -2.97%. CNA shares traded at GBX 69.40, up 1.31% as of 11:03 am GMT+1 on Wednesday.
Drax Group Plc (LON: DRX)
Drax Group belongs to the FTSE 250 index and has a market cap of £2,032.73 million, with a one-year return of -4.17% and a YTD return of -16.36%. The stock has an EPS of 0.20 and was trading at GBX 506.00, down 0.20% as of 11:19 am GMT+1
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
