Prepayment meters

If you would like to pay for gas or electricity upfront, rather than in monthly or quarterly instalments, a prepayment meter could be an option worth considering.

With a prepayment meter, you use a top-up a card or key to load more money onto your meter. Just like a pay-as-you-go mobile phone, money is taken from that balance every time you use energy – and if you run out of credit, your power will be temporarily switched off until you top up.

With the introduction of smart prepayment meters, it’s now much easier to top up the meter as you can do it via an app on your phone or online. Or if you have more money on one meter, gas for example, you can swap it over to the electricity meter if it is running low on credit.

What are the pros and cons of prepayment meters?

Here's a roundup of the advantages and disadvantages of prepayment meters:

Customers in debt

If you’re in debt with an energy supplier, prepayment meters can be installed to manage the arrears. This is done to help you pay off the debt in small amounts, rather than lump sums, as well as paying upfront for the energy you use. 

Forced prepayment meters are meant to be used as a last resort, as the prepayment tariffs can be more expensive, but some companies opt for it over traditional payment plans because those can be defaulted on.

Is prepaid electricity more expensive?

Sometimes prepayment customers are charged more for each unit of energy than people on standard credit meters. In fact, the cheapest prepaid tariffs (£1,052, according to Ofgem) was found to be over £200 more expensive than the cheapest direct debit tariff (£846) in August 2019.*

Being on a prepaid meter also means you’ll miss out on the best offers, such as fixed rate tariff deals. However, increased competition is leading to more competitive pricing, and the introduction of a temporary price cap is saving customers around £300 million on their bills, according to the CMA.

In fact, Ofgem has upped its cap to £1,242 a year*, which means that customers are paying more than last year. This cap changes each April and October, so look out for deals on prepayment tariffs. The dominant energy providers charge just a pound or two less than the cap, while others charge under £1,000 for the year on average – it depends on which supplier you are with.

Don’t forget that different energy companies charge different rates, so you could save money by shopping around. And it’s easy to change your provider – find out how to switch from a prepayment energy meter with our guide. 

*Data collected by Ofgem, Energylinx and Energyhelpline, accurate as of September 2019

According to data collected by Ofgem, Energylinx and Energyhelpline, accurate as of September 2019

How to top up your prepayment meter

You may be able to top-up your gas and electricity key online, but in the majority of cases you will need do it in person. You can load money onto your prepaid keys and cards at the Post Office or at a shop with a PayPoint or a PayZone machine.

Once you’ve added a new balance, you simply insert the card or key into the meter and the money gets topped-up. Some suppliers will give you emergency credit for when you run out of balance, but this will need to be repaid. And if you don’t top-up your key or card, you risk losing power to your home.

If your prepaid key or card is lost or damaged, you should contact your energy supplier immediately. They will be able to sort a replacement – sometimes you can collect one from your local charge point while you wait for your new one to arrive – but you may be charged for any new cards or keys.

Smart meters can be set to prepayment mode or credit mode, so if you are a prepayment customer and you have had a new smart meter installed, the good news is that you can top up on an app or online.

Moving into a home with a prepayment meter

Some people inherit a prepayment meter when they move to a new home. If this happens, you should register with the supplier as the new inhabitant immediately, or you could end up paying off someone else's debt.

How to remove a prepayment meter

If you rent, you need to seek permission from your landlord before you can remove a prepaid meter. Once you’re sure you want to change to a credit tariff, there are a few ways you can request the removal of one – but be warned that you may incur a fee, because suppliers may pass the cost on to you.

Before you contact your existing energy company, it’s worth checking the different prepayment tariffs available – you might find that you could save money by switching providers.

If you find a new supplier you want to switch to, you can ask them to remove the prepaid meter for free. Some energy companies will do this, but others will still charge. If you want to stay with your existing provider, you may be able to negotiate the removal of the prepayment meter if you switch to one of their other plans – if you get a fixed tariff deal you may be able to save hundreds of pounds a year.  

Can I compare energy prices if I am on a prepayment meter?

If you use a prepayment meter, you can still compare energy prices and potentially switch to another cheaper prepayment deal. All you need to do is enter your details, and tell us how much energy you use and the current supplier and tariff you’re on, and we’ll tell you how much you could save if you switch.

It’s worth remembering that the switching process is really simple, and you won’t see your energy supply disrupted at any point. It takes less than five minutes to find out if you could save, and the process should happen within 21 days.

Swicth and save with Energy Monitor 

Switching your energy supplier is quicker and easier with MoneySuperMarket’s Energy Monitor. We’ll let you know as soon as there’s a cheaper tariff available for you, whether it's prepayment or monthly/quarterly billing, so you can effortlessly switch and save money on your energy bill.