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9 August 2022

Media release: Consumer NZ survey finds struggling New Zealanders are turning to prepay

Consumer NZ’s energy survey has found people who struggle to pay their power bills are increasingly having their power disconnected - and turning to prepay power plans.

In the survey, 28% of people who said they struggled to pay their bills over the past year have had their power disconnected before. That’s double what the same group said three years ago, and 15% of those who struggled to pay their power bills over the past year have now switched to prepay.

Consumer’s survey shows young families with preschool children are most likely to move to prepay.

Paul Fuge, Consumer’s Powerswitch manager, said the survey highlights the extent of the struggle many customers are facing at present.

“People in financial difficulty often end up on prepay because, if they've been disconnected, it’s hard to find a new retailer willing to take them on.”

Although prepay helps customers avoid shock power bills, there is a downside: When customers can’t top up their account, their power is disconnected. However, currently it’s impossible to tell how often this is happening.

The Electricity Authority’s disconnection figures show fewer people are being disconnected by their power company, but the stats don’t include prepay “self-disconnections”.

The two main prepay power providers, Globug and Wise Prepay Energy, have about 27,000 customers between them.

“The official stats hide the true number of people going without power,” said Fuge.

Dr Kimberley O’Sullivan, a senior research fellow at Otago University, said we’d see disconnections going up if prepay self-disconnections were included in the statistics.

“[This] survey tells us what we suspected: that it’s true people are experiencing disconnection more and are being moved to prepay, where we can’t see if they need any help.”

Dr O’Sullivan said prepay providers know how often, and for how long, people are self-disconnecting. “But they’re not required to show it.”


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