How to switch from a prepayment energy meter

Published:
27 September 2012
Topic:
[Category],News,Gas & Electricity

Switching from a prepayment meter to a credit meter can often save you money on your energy bills as it allows you to take advantage of the more favourable tariffs on the market. And now that Ofgem has adjusted the rules on who can change meters, more people are eligible to make the switch.

However, changing from a prepayment meter to a credit meter is not quite as straightforward as switching energy supplier because the new meter will have to be physically installed in your home. This means installation times can be affected by the lead times set by the meter installers.

Simply switching energy supplier is a matter of paperwork alone - there's no change to the physical delivery of your energy supply. That said, it can take up to six weeks.

So, switching from a prepayment meter to a credit meter will not be instant and there may also be a fee involved to cover the cost of the new meter and its installation.

But if you're attracted by the idea of making the move, read on to find out how Ofgem has made it easier to switch to a credit meter, the process involved in switching and how ditching the prepayment meter could save you money...

Ofgem rule change could help tens of thousands

Prepayment meters are primarily designed for those on low incomes or those that do not successfully pass the credit check that is required for customers who want to pay for their energy quarterly or monthly.

However, customers on prepayment meters often suffer from having to pay higher prices and have a reduced choice as they are not eligible for the more cost effective tariffs and cannot take advantage of online energy discounts or the reduced rates offered to those who pay via direct debit.

And, up until now, anyone in debt to their energy company by more than £200 has not been eligible to switch from prepayment meter to credit meter. But Ofgem has pushed through a change in the rules so that anyone who owes their supplier up to £500 can now make the switch.

Ofgem figures show that there are 320,000 gas and 315,000 electricity prepayment meter customers who are in arrears with their suppliers. Most accumulated the debts while they were on credit meters and were subsequently moved to prepayment meters under the terms of their repayment plan.

However, this new ruling will only be applicable if you're also switching supplier; if you're staying with your current energy provider then it's most likely that it will only agree to put you on a credit meter if you clear any arrears you have with them.

The rule change takes effect from November 1, 2012 and is part of a wider campaign by Ofgem to encourage suppliers to resolve debt issues and bring down the number of disconnections by working more closely with customers.

Let's take a look at exactly what is involved in the switching process...  

How to switch from a prepayment to a standard meter

Even though the rules have changed on who exactly can switch from a prepayment meter, it can still prove to be something of a drawn-out process and you will have to contact your energy supplier direct to find out whether you'll be eligible for a credit meter.

This will typically involve them running a credit check on you, the results of which will help them decide whether or not they think you'll be able to keep up with repayments, and, if successful, an engineer will be sent round to remove your current meter and install the new one.

Depending on your supplier, this process can take anywhere between a couple of days and a couple of weeks, and you may also be charged a fee, but this should be offset by the savings you will make by signing up for a cheaper tariff.

As each of the Big Six energy suppliers has its own rules around the replacement of prepayment meters, let's take a look at what's involved...

British Gas

Should you successfully pass a credit check then British Gas will take away your prepayment meter and replace it with a credit meter for nothing provided that you have no outstanding debts with them.

It will also replace your old meter free of charge if you have moved into a new property where a prepayment meter is already installed and the switching process should take no longer than four weeks.

It's also worth noting that if you have a smart meter installed and want to change from a prepayment tariff to a credit tariff then this will be done electronically and there's no need for a new meter to be installed.

EDF Energy

EDF Energy will also remove a previously installed prepayment meter and fit a credit meter free of charge, and the process can take up to a couple of weeks depending upon where you live and the lead times set by the meter installers.

One stipulation is that you have been an EDF Energy customer for at least 28 days to ensure the all of your energy usage information is accurate when your account is set up.

EDF Energy will only refuse to change the prepayment meter if it has been installed because you are significantly in debt.

E.ON

E.ON has recently changed its procedures for switching meters and will now replace prepayment meters with credit meters completely free of charge, regardless of how long you have been a customer.

Any decision is subject to a credit check being carried out - the only exception being customers deemed as 'vulnerable' - and although E.ON prefers credit customers to pay by direct debit, this is not mandatory.

However, if you are a current E.ON prepayment customer and have any outstanding arrears, these must be paid in full before you can switch over to a credit meter.

 

Npower

If you have moved into a property that has a prepayment meter installed but you had a credit meter at your previous address then Npower will replace your current meter with a credit meter free of charge.

Npower will not replace a meter if you have any arrears on your account and installation will also be subject to you passing a credit check.

Meters are usually replaced within 10 working days of a request being agreed and Npower normally charge £60 to cover the cost of removal of the old meter and installation of the new one.

 

 

Scottish Power

Scottish Power will change your meter provided that you have been a customer for 12 months and that you are prepared to pay your bills by direct debit.

You may also be required to pay a cash deposit that will be refunded to you should you successfully meet all of your payments over the course of the first year.

Scottish Power also charge for switching meters; £45.91 to switch a prepayment electricity meter and £62.90 to change a gas meter.

 

SSE

SSE will replace your prepayment meter with a credit meter provided that you successfully pass a credit check and that you are prepared to pay future bills by direct debit.

You will also be charged £52 per meter. This is to reflect the costs SSE incurs for removal and installation. Once the credit check has been passed and the fee paid, you should have your new meter installed within 10 working days.

Switching to save money

As you can see, the costs of switching can vary between providers and so you may consider sticking with your prepayment meter and just switching supplier to save money.

However, doing this means that not only will you still be paying a lot more for your energy than you need to - energy charges for prepaid customers are higher than those paid by credit meter customers - but you will also have no protection from any future price rises.

If you feel it won't be cost-effective to switch meters, or you simply do not have the money available to pay for your current prepayment meter to be replaced, then it may be a good idea to switch to a provider that will install a new meter free of charge.

Then, once you have been with your new provider for the required amount of time (for instance, EDF energy requires you to have been a customer for 28 days), you can change to a credit meter free of charge and then make further savings on your energy bills by taking out a more competitively priced tariffs.

Follow Les on Twitter @LesRobertsMSM

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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Les Roberts

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