Poor pay more for essential services

The financially disadvantaged end up paying more or receiving less from essential services like credit, health and utilities.

08:45 15 September 2004

The financially disadvantaged end up paying more or receiving less from essential services like credit, health and utilities, according to the National Consumer Council (NCC).

The council's report, Why do the poor pay more?, on the double disadvantage inflicted by poverty points out that many essential goods and services are increasingly provided by the private sector.

"Lack of money isn't the only problem with being poor," says the NCC chair, Deirdre Hutton.

"They face a double disadvantage. The poor pay more because life on a cash budget is more expensive. And if you can't get around because of a disability or limited transport, you can't shop around for the best deal."

She adds: "Our dossier is a call to action against market exclusion - a call we hope will have a positive impact on the lives of at least half a million disadvantaged consumers over three years."

Ms Hutton continued: "While new technology can be a cost-saver for business - and some consumers - it can raise further barriers for customers who lack confidence or basic skills.

"Increasing market complexity - mobile phone packages and more choice of energy suppliers for instance - is another trend that excludes disadvantaged groups."

NCC's analysis suggests the government should develop a framework for funding essential items and feels private companies must organise systems of dealing with the poorest so as to make certain basic services more affordable.