Poorest in Scotland 'pay more for services'

Prepaid meter Image copyright Thinkstock
Image caption Lower income Scots are more likely to use expensive pre-payment meters, according to the report

Poorer people in Scotland are paying more than others for essential services, according to research.

Citizens Advice Scotland (CAS) report said those on low incomes often paid above average for energy, telecoms and financial services.

Bigger bills makes their financial situation worse which further affects health and relationships, CAS said.

The "Paying More To Be Poor" report is based on research conducted by Ipsos Mori.

Researchers found that lower income Scots were more likely to use expensive pre-payment meters.

Less than a quarter of those who used the meters had switched their energy supplier in the last three years. Those living in the most deprived areas of the country were even less likely to switch suppliers, according to the report.

They were also more likely to use mobile phones on pricier pay-as-you-go plans, researchers said.

In addition, poorer people in Scotland were less likely to switch phone suppliers and more likely to be without a mobile at all - and so were hardest hit by the rise in landline costs.

Those polled were also questioned about financial services. The CAS said low income consumers would often take out credit or loans without understanding the full costs involved.

Others had no home contents insurance because they found it unaffordable.

Cost traps

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."

CAS has made a number of recommendations for addressing the problem, including raising awareness of "cost traps" and the importance of making informed choices.

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

The Scottish government said it shared the concerns about people on low incomes paying more for essential goods and services, and is taking action to tackle the issue.

A spokeswoman said: "The poverty premium was raised as an issue of particular concern by many people during our fairer Scotland discussions last year and we will be publishing our Fairer Scotland Action Plan soon which will respond to these issues."

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