Prepayment or &#;pay-as-you-go&#; meters are a type of gas and electricity meter that require you to pay for your energy before you use it. This is different to a credit meter where you pay for your energy after you use it.
Around four million households across the UK are on prepayment meters, according to the energy regulator Ofgem. Here&#;s what you need know about them.
Much like pay-as-you-go mobile phones, prepayment energy meters must be topped up with credit in advance. The method of top-up can vary depending on the energy supplier and meter, but it will usually be a token, key or smartcard.
Top-ups can be made at your local Post Office or any shop where you see the PayPoint or Payzone logo, such as newsagents, local corner shops, garages and supermarkets.
Some older prepayment meters are coin operated, where you put money directly into the meter, although they are now quite rare.
Smart meters are the new generation of gas and electricity meters. They allow you to view how much energy you&#;re using at home in real time in pounds and pence, with the aim of helping you to cut down on energy usage and save money.
All households in England, Scotland and Wales must be offered a smart energy meter by the end of . This includes smart prepayment meters. Your energy supplier will tell you when you can get one, but you can also request one yourself.
Smart prepayment meters mean you can top up online or via an app on your mobile or tablet, without the need to leave the house. If you set up an online account, you will also be notified when you&#;re about to run out of credit.
If you can&#;t afford to top up your meter or you can&#;t get to an outlet to buy credit, most prepayment meters have emergency credit you can use. This is typically around £5 for electricity and £10 for gas.
Note that prepayment tariffs have a standing charge of around 25p to 30p a day that must be paid regardless of whether you use any gas or electricity. You&#;ll need enough credit to account for this.
Your property may have already had a prepayment meter fitted when you moved in, or you may have asked your supplier to fit one to make it easier to budget. If you are renting, your landlord might have opted to have a prepayment meter fitted to ensure tenants do not leave behind unpaid bills.
Your energy supplier may choose to fit one if you have fallen into debt on your energy bills. Prepayment meters can help households repay outstanding debts in small amounts, rather than in one lump sum. If you top up your meter with £25, for example, £5 of this might go towards the existing debt and the remaining £20 towards new energy.
Your choice of tariff will be more limited if you have a prepayment meter, but it&#;s still worth shopping around to see whether you could save money by switching.
Thanks to the Debt Assignment Protocol, you&#;ll still be able to switch if you&#;re in debt to your supplier, providing you don&#;t owe more than £500 for your gas and £500 for your electricity. Your debt will be transferred to your new supplier, and you&#;ll repay them instead based on the new terms of your agreement.
The switching process is the same as it is with a credit meter. Once you&#;ve run a comparison and found a new prepayment tariff to move to, your new supplier will take care of the switch. The switch should take around 21 days to be completed.
Prepayment meters can be useful as they help with budgeting. Also, as of 1 July , the price differential between prepayment meters and standard credit meters no longer applies. Prior to this date, prepay customers were charged more than direct debit customers, ostensibly to account for greater infrastructure costs, but the government decreed that the two types of meter should have the same charging structure in the spring of .
However, if you would prefer a credit meter, most energy suppliers will allow you to switch, providing you meet certain conditions. You&#;ll usually need to pay any outstanding debt on your account, for example, and you may need to pass a simple credit check.
Many suppliers will install a new meter for free, but others may charge, so check first. If you&#;re renting, you&#;ll need to get your landlord&#;s permission to switch meters.
If you&#;re moving out of your home, aim to run the balance left on the prepayment meter as close to zero as possible. Contact your energy supplier in advance with your new address so that any remaining credit can be refunded. Or a repayment plan can be set up if you are in debt.
Don&#;t leave the key or card in the meter as this will drain the meter&#;s battery. Instead, leave it with your landlord or next to the meter for the new owners.
If you move into a property with a prepayment meter, contact the energy supplier as soon as possible. Try not to top up the meter before you move in as you could be paying for the previous occupants&#; debts. If you do top up, your supplier should refund you for any extra charges applied.
The prepayment price cap was introduced by Ofgem in . Updated quarterly, it limits the amount energy suppliers can charge per kWh of gas and electricity (also known as the unit rate). Its purpose is to help ensure customers are protected from being overcharged.
A similar cap is in place for those with credit meters who are on standard variable or &#;default&#; tariffs. This is also reviewed quarterly.
If you have a smart meter in prepayment mode you can ask your energy supplier to change it so you can pay by credit. This means you pay for your energy after you use it.
If you have a non-smart prepayment meter, you can ask your energy supplier to replace it with a smart meter. This type of meter has prepayment and credit settings your supplier can turn on or off without needing to visit your property.
Your supplier usually won&#;t switch you to paying by credit if you&#;re in debt to them.
You can find out who your gas or electricity supplier is if you don&#;t already know.
You won't have to pay to have a smart meter installed. If your supplier wants to charge you, contact the Citizens Advice consumer helpline.
If you don&#;t want to have a smart meter installed you should speak to your supplier. Ask if they have any other options for you.
If you pay your supplier directly for your energy you don&#;t need your landlord's permission to change how you pay for it. Your supplier will ask you to pass a credit check or pay a deposit if you&#;re switching from prepayment to credit.
You could consider letting your landlord know if you&#;re going to change your meter. You should think about your relationship with them and if they&#;d be annoyed by you changing the meter. They might use it as a reason to evict you.
You might need to get your meter or smart meter mode changed back at the end of your tenancy.
If you&#;ll be in the middle of a fixed tariff contract when your tenancy ends, you might need to pay an exit fee.
Check your tenancy agreement - it should say if you need to change it back.
Find out more about switching suppliers and tariffs when you&#;re renting.
In February Ofgem, the energy regulator, asked all energy suppliers to review any recent decisions they made to:
force customers onto a prepayment meter
remotely switch smart meter customers to prepayment
Ofgem asked energy suppliers to check they followed the rules when switching customers to prepayment. You can check the rules your supplier should have followed.
If your supplier didn&#;t follow the rules, you might be able to get your:
non-smart prepayment meter switched to a smart meter in credit mode
smart meter switched to credit mode
If you have a non-smart prepayment meter and you don&#;t want to have a smart meter installed you should speak to your supplier. Ask if they have any other options for you.
In some cases you might be offered compensation.
Complain to your supplier if you think you were wrongly switched to prepayment.
Tell your supplier if it isn&#;t safe or practical for you to be on prepayment, even if you&#;re in debt - switch your account so you pay by credit.
If you&#;re aged 75 or older
Tell your supplier being on prepayment isn&#;t safe or practical if you&#;re aged 75 or older and you:
live alone
live with someone, but neither of you can safely get to, work or top up your prepayment meter
If you live with young children
Tell your supplier if a child under 2 years old lives in your home - ask your supplier to move you off prepayment.
If you&#;re disabled or have a health condition
If you&#;re disabled or have a health condition, you shouldn't be on prepayment.
Link to acrel
Tell your supplier if you or someone in your home has a:
health condition or disability which needs a continuous supply of electricity - for example, you use a stair lift or take medication which needs to be kept in a fridge
health condition which is made worse by a cold home - for example, sickle cell disease
severe or terminal health condition - for example, COPD or cancer
You can also ask your supplier to move you off prepayment if you have a health condition or disability which makes it difficult to reach, work or top up a prepayment meter. You can only ask to be moved off prepayment if there&#;s no one else in the home who can help.
If you can&#;t afford to top up
If you run out of gas or electricity because you can't top up your meter, this is called 'self-disconnecting'. Tell your supplier you might have to self-disconnect if you stay on a prepayment meter.
Tell your supplier if you can&#;t afford to top up and you or anyone in your home:
is pregnant or has children aged between 2 and 5 years old
has a long term health condition, for example, Parkinson&#;s or osteoporosis
has a mental health condition
has had a recent bereavement
has a health condition which is made worse if they can&#;t eat hot food - for example, malnutrition
You should tell your supplier how your situation will be made worse if you&#;re forced to stay on prepayment - give them as much detail as you&#;re comfortable with.
It might help if you can show your supplier how much you have left each month after paying essential bills and priority debts. If you&#;re close to a negative budget it might mean your supplier won't force you to stay on prepayment.
A negative budget means you have more money going out than you have coming in every month.
Try and be as accurate as you can when making your budget. Before you start, find your most recent:
bank statements
payslips
debit and credit card statements and bills
receipts for things you pay for in cash
Use the budget calculator on the National Debtline website. You'll create a document that you can keep.
Make sure you save a copy - you&#;ll need to refer to this later. You&#;ll also need to send a copy to your energy supplier.
If you need help managing money you owe your energy supplier or anybody else, check our debt advice.
If you can&#;t get to or top up your meter
Tell your supplier if you can&#;t reach or top up your meter. Tell your supplier if you can&#;t:
reach your meter - for example, if it's above head height and you&#;re disabled
get to your meter - for example, if it&#;s in a shared cupboard you don&#;t have a key for
easily top up your meter - for example, if you don&#;t have a car and the nearest shop is over 2 miles away or you don&#;t have access to the internet to top up online
There might be ways around problems like these, for example, someone else in the home could reach or top up your meter. Your supplier might be able to move your meter or let you top up by using an app or over the .
Tell your supplier anything which makes things more difficult for you to use a prepayment meter, for example, if you&#;re recovering from an injury. You should also tell them if you live with anyone who is:
aged 16 and under
aged 65 and older
You should ask to be put on your supplier's priority services register. This will give you extra help with your energy supply.
If you don&#;t want to be on prepayment anymore, your supplier must:
remove your old-style prepayment meter and give you a smart meter in credit mode
switch your smart meter to credit mode
If you&#;d prefer to stay on prepayment, your supplier must reset your meter so you're not paying too much.
Before your supplier installs your new meter or turns off your smart meter's prepayment setting, you might have to have a credit check or pay a deposit. If you&#;d rather not have a credit check you can ask to pay a deposit instead. Your supplier might not agree to this but it&#;s worth checking.
If your supplier asks for a deposit, it should be for a reasonable amount. They should work out what&#;s reasonable by looking at how much energy households like yours use over 3 months. This is usually between £150 and £300, though it could be more.
If it's much more, complain to your supplier, asking to know how they decided the amount.
Before your supplier installs your new meter or turns off your smart meter's prepayment setting, make a note of how much credit you have left. Your supplier will transfer your credit to your new account, so it will go towards your first bill.
If you owe money to your supplier because you've used some emergency credit, write this down instead. They&#;ll add what you owe to your first bill.
You should also take a final meter reading.
It&#;s a good idea to take a photo of the meter, so you have proof of what it says.
Your supplier should offer you an appointment as soon as they can. This depends on how urgent your appointment is and how busy they are.
Appointments are usually within normal working hours. Working hours usually means between 9am and 5pm. You usually have to choose a time slot between 2 and 4 hours.
If they offer an appointment that doesn't work for you, ask for a different date and time. Your supplier should say yes if they can.
Your supplier must pay you compensation if they:
miss the appointment
change the appointment without your agreement and with less than 1 working day&#;s notice
send someone without the right qualifications or tools to do the work
They&#;ll pay you £30 compensation within 10 working days. If they haven&#;t paid within 10 working days, they&#;ll pay you another £30.
Contact us to discuss your requirements of prepaid energy meter. Our experienced sales team can help you identify the options that best suit your needs.