Vulnerable households are spending £250 million more than they should on energy bills as companies break competition rules to fleece prepay customers, new research suggests. Regulators say energy firms should only charge £63 more for a prepay metre compared to a traditional credit one. But researchers say British Gas, Npower and Eon are charging far more and are breaking Competition and Markets Authority (CMA) rules. According to renewable energy providers Bulb, 760,000 British Gas prepay customers are paying £222 more a year than needed. Meanwhile 320,000 Npower prepay homes pay £160 more than required and Eon Customers pay £51 more than required.

Co-founder and chief executive of Bulb Hayden Wood said: ‘There’s no good reason why these suppliers are charging prepay customers so much more for their energy.’ Suppliers typically charge more for prepay metres because the cost of running them is higher, according to metro.co.uk.

But regulator Ofgem has said suppliers must do more to help prepay customers because they are typically the poorest households in the country who have lower credit ratings and larger energy bill debts. In 2016 the CMA said the cost difference should be no more than £63 a year. But the cheapest British Gas prepay tariff for an average home is £1,241.58 a year.

In comparison the cheapest tariff for traditional meters is £965.12, making a difference of £285.46. Npower’s cheapest prepay tariff is £1,241.88 versus its cheapest standard tariff of £1,019.03 – a difference of £222.85. Eon is £1,241.88 versus £1,127.95 – a difference of £113.93.