Some energy customers with prepay meters could save an average of almost £120/year by switching to one of the two cheapest new fixed-term tariffs.
A typical household will pay an average of £1,018/year with the 12-month fixed tariff from iSupply (which is only available through MoneySupermarket), instead of the £1,137/year average cost based on typical usage from the big six energy suppliers (British Gas, EDF, E.on, Npower, Scottish Power, SSE).
It's important to note the iSupply tariff is only available for customers with key-operated electricity prepayment meters and card-operated ('Quantum') gas prepayment meters. Customers with other types of meter will need to look elsewhere.
EDF's new tariff is fixed until 31 October 2017 and during that time you'll pay £1,037/year on average, in what is the cheapest big six prepay offering on the market.
These new tariffs are the cheapest prepay fixes on the market and they're available for dual- (gas and electric) and single-fuel.
Choices are opening up for prepay users, but it's still an outrage that some of society's poorest often pay more for their energy with these meters. So if you can, ditch and switch to a credit meter (in other words, a standard 'billed' meter) usually this involves a credit check and ensuring you've repaid any debt owed to the supplier.
Additionally, our Cheap Energy Club is a great way of checking if you're overpaying for gas and electricity and it will notify you when a better deal is available.
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Should I switch?
An estimated six million people in the UK have prepayment meters that's nearly 10% of us. Yet a lack of choice in available tariffs has meant few consider switching and many don't know they can.
The basic concept of a prepay meter is that you pay for electricity and gas before you use it, rather than after. However, prepay meters also tend to cost more than standard meters and are sometimes imposed on people who've fallen into debt with their energy supplier, which makes getting a good deal even more crucial.
British Gas standard variable customers will pay an estimated 4.78p per kilowatt hour (kWh) for gas, and 16.31p for electricity (these are tariff comparison rates based on typical UK usage).
Customers on iSupply's new 12-month tariff 'Fixed 201706 v2' will pay considerably less on average around 4.5p per kWh of gas, and 15.38p per kWh for electricity. That makes each fuel around 6% cheaper than British Gas standard prices.
As we've said, the iSupply tariff is only available for key-operated meters, and the firm also caps the amount of electricity it can provide annually at 30,000 kWh. That's almost 10 times more than the average household uses, however, so it's unlikely to affect you.
Those opting for EDF's 'Blue+Fixed Prepay October 2017' will pay an average of 4.26p per kWh of gas the cheapest of the lot but on electricity it's more expensive at 16.50p on average. Do remember though that the average dual-fuel household uses much more gas than electricity.
I want to switch which tariff should I choose?
Firstly, it's worth pointing out that you can't switch your prepay tariff if you owe more than £500 per fuel to your supplier. If you owe less, you can switch.
Our Cheap Energy Club is a great way to ensure you find the best deal for you. It's free to use and works by you telling us what your current gas and electric tariff is and we'll tell you if you're overpaying or not. Then, as many tariffs are only cheap in the short term, we'll monitor the market for cheaper ones and email you when you should switch.
Also, if you switch your dual fuel via Cheap Energy Club we give £30 to you as cashback (£15 single fuel).
Meanwhile, you should also consider the following points when switching:
- The price you pay for your prepay tariff will be impacted by your average usage, and whether you have a gas connection in your home. In some circumstances dual-fuel users might be better off with a different tariff for each fuel.
- The new iSupply and EDF tariffs are fixed, giving you more security than a variable tariff, where costs could rise or fall.
- If you switch now, EDF offers you the longest fix of the two, lasting until 31 October 2017. The iSupply fix lasts for 12 months from your start date (usually the day you switch). Neither has exit charges, so you can leave during the contract term if a better deal comes along.
Both the tariffs require you to manage your account online, so regular and reliable internet access is a must if you want to switch.