Customers will now be forced to hand over an extra £90 a year for gas and electricity from EDF – just for choosing to pay by cheque or cash.
The firm is hiking the charge for those who pay quarterly for both gas an electric by an inflation-busting 15 per cent – £12 – to £90 if they do not settle their bills by direct debit.
The rise will hit 550,000 households, including elderly customers who rely on paying bills by cheque or cash.
Customers will now be forced to hand over an extra £90 a year for gas and electricity from EDF – just for choosing to pay by cheque or cash
EDF Energy claims the £90 annual fee reflects the extra cost of handling the payments compared with monthly direct debits, taken automatically from customers’ bank accounts.
The company says the figure is on a par with charges from other energy companies – and in line with what is allowed by industry regulator Ofgem.
However, the idea of penalising customers based on payment method is controversial.
Age UK’s Caroline Abrahams said: ‘While direct debits are convenient for many people, some older people still want to use alternatives such as cheques to pay their bills because they find it helps them to budget.
‘To impose such a big increase in the charge for paying this way places them under even greater burden, particularly while there is still a problem of inaccurate estimated bills. People of all ages need a range of safe, convenient and affordable ways to pay for their essential services, and we are concerned to hear that companies are hiking these costs.’
EDF is also putting up the standing charge linked to its electricity accounts, which will see higher bills for 1.4million customers.
This will take the figure for electricity-only customers up to £85 a year and those who have both electricity and gas to £181.
The charge is a set fee that applies to everyone, regardless of how much energy they use. The effect of the changes is to put up the annual cost of a dual fuel bill – for gas and electricity – by 1.4 per cent to £1,158 a year for those who pay by direct debit.
Customers who pay by cheque or cash will see bills rise by 2.4 per cent – £28 – to £1,248.
The Government is bringing in a price cap later this year on the most expensive standard variable tariffs – but it is not clear whether this will also curb standing charges or penalty fees that are linked to payment methods.
Earlier this week, British Gas came under fire from the Government after announcing an increase in its standard variable tariff – adding £60 a year to bills.
The company blamed increases in the wholesale price of energy as well as additional costs caused by Government policies to support a switch to green energy, such as wind farms and smart meters. EDF said its price rises were for the same reasons.
Earlier this week, British Gas came under fire from the Government after announcing an increase in its standard variable tariff – adding £60 a year to bills
Alex Neill, of consumer watchdog Which?, said: ‘The second price hike from a big energy supplier in days will leave customers questioning why their bills are rising again when they’re not seeing improvements in service.’
Claire Osborne, energy expert at comparison site uSwitch.com, said: ‘Following a shock price rise from British Gas, it is incredibly disheartening to see EDF jump at the opportunity to hike prices. Now that two of Britain’s biggest suppliers have raised prices, we are starting to see the uncomfortably familiar pattern where one company follows another.’
Beatrice Bigois, of EDF, said: ‘We know that price rises are not welcome and we have worked to offset rising energy and policy charges by cutting our own costs.
‘However, these rising costs mean we will be increasing our standing charge for electricity on June 7, affecting around 40 per cent of our customers.
‘We will be writing to affected customers this month to encourage them to choose a fixed price tariff or to pay by direct debit to save on their bills.’