If you've got a prepaid gas or electric meter, your options are finally getting better. There are now cheap fixed tariffs available that help you save AND beat future price hikes.
Prepayment meters are electricity and gas meters that let you pay for your energy on a pay-as-you-go basis. Over four million UK homes use them.
You top up via a key or card, which you can credit at newsagents, post offices, garages, or sometimes online. While they can help to budget, you usually end up paying more for energy. This guide shows you how to switch provider or change meter to save £100s.
Now is the time to switch and fix
Winter's here and that means it's an ideal time for prepay meter users to switch as there are cheap fixed tariffs available. These deals aren't always around for prepay users, so it's worth checking them out (alongside options for getting a standard meter for even bigger savings).
Fixed tariffs freeze the price of each unit of energy you use for a set time. Always watch out for exit fees though - they're what you'll be charged if you leave before the tariff ends.
British Gas, E.on, Npower, Scottish Power and SSE have announced cuts to gas prices of between 3.5% and 5.1% for both standard and prepayment customers - this follows huge political pressure off the back of a 20-30% fall in wholesale prices. But while there's less competition when it comes to prepayment meters, if you're on your supplier's standard tariff it's always worth checking if you could save big by switching to a fix.
There are a few cheap fixed tariffs worth considering. Here’s two of the best:
EDF Energy: Blue+Fixed Prepay Oct 2016
This EDF* tariff fixes your rates until October 2016.
It's £30 more on average than Ovo's fix below but it prevents price hikes for a year longer and there are no exit fees so you're free to leave without penalty.
Feedback for EDF is positive - in our latest poll it was scored 'great' by 55% of voters.
Ovo Energy: Pay-as-you-go (PAYG) Energy Plan
Ovo's* tariff is the cheapest fixed tariff AND the cheapest overall prepay tariff (on the Ovo home page, click Energy Plans/Pay As You Go to see it). For typical users it's £30/year cheaper than a standard prepay tariff from most 'big six' providers. It's also got decent customer feedback and 81% said it was 'great' in our last poll.
It comes with a couple of catches though. Although it's slightly cheaper on average, you're locked in for a shorter period - one year from the date you sign up. There's also an exit fee of £30 per fuel if you leave early.
If long-term price certainty is more important to you, EDF's deal may be a better bet, though Ovo's a viable option if you're not likely to switch in the next year. To see YOUR bespoke prices for both tariffs, use our free MSE Cheap Energy Club top picks comparison.
Cheapest Prepay Deals (Based on typical usage)
REMEMBER! These are average prices. Always do a cheap fix comparison.
|Supplier||Fixed for/until||Exit fee||Cost/yr||Service feedback (1)|
|Big Six prepay tariffs||-||-||-||£1,260||-|
|Cheapest prepay tariff (2)||Ovo*||12 months||£30/fuel||£1,209||81% great
|Longest no-exit fee fix||EDF*||31 Oct 2016||None||£1,237|| 55% great
|Cheapest non-prepay tariff (3)||Extra Energy||31 March 2016||£25/fuel||£919||New provider with limited feedback|
|Source: Moneysupermarket.com. All tariffs assume Ofgem medium usage. Varies by region.
(1) For each firm, not tariff, based on MSE poll of 7,782 people, Nov 2014. (2) Links to home page. Click on Energy Plans, then Pay As You Go Energy. (3) Monthly direct debit.
Big price rises aren't widely predicted, however as E.on has cut prices (slightly) others could follow.
Find out about suppliers' historical price moves
All the major suppliers hiked prices last winter, but some have since snipped them after the Government cut green levies. Green levies are payments that suppliers must contribute to certain schemes (eg, insulation) which make homes more energy efficient - when the Government cut them, this enabled suppliers to trim bills (slightly).
Last winter's price changes - 2013/14 rises by provider
Price changes vary not just by company, but by region, so there can be huge differences. The following are the most recent average prepayment changes for major suppliers and where they've passed on the green cuts. Also see the Green levy reforms MSE News story.
Scottish & Southern Energy (SSE) - includes Swalec, Southern Electric, Scottish Hydro and Atlantic
8% gas hike, 8% elec on average on 15 Nov 2013. SSE then cut prices by 4% on average on 24 Mar 2014.
10% gas hike, 9% elec hike on average on 15 Nov 2013. Ebico then cut prices by 3.5% on average on 24 Mar 2014.
2.7% gas and elec hike on average on 18 Jan 2014. Green levy changes were already factored into this rise.
10.4% elec hike, 8.4% gas hike on 23 Nov 2013. British Gas then cut prices by 3.2% on average on 1 Jan 2014.
10.3% gas hike, 9.1% elec hike on average on 1 Dec 2013. Npower then cut prices by 2.6% on 28 Feb 2014.
8.3% hike across gas & elec on average on 6 Dec 2013. Scottish Power then cut prices by 3.3% on average on 31 Jan 2014.
3.9% gas hike, 3.9% elec on average on 3 Jan 2014. Green levy changes were already factored into this rise.
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You can switch and save on prepaid gas or electric meters. Our Cheap Energy Club tool makes switching as easy as possible and helps you get constantly cheap gas and electricity.
All you need to do is tell it where you live and how much energy you use. Then we'll tell you if you're overpaying on your current deal or if there's a cheaper alternative.
But the best bit is we'll keep monitoring your tariff for you every month to ensure you're always on the best deal. Plus if we can switch you, you'll usually get £30 cashback.
It's also worth checking out the comparisons below - they offer cashback options too.
The limitations of comparison sites - they don't always show all tariffs
Bear in mind though that some comparison sites by default only show you tariffs you can switch to via them (ie, where they're paid commission). This filters out some results - Cheap Energy Club shows you ALL those available by default.
If you do use a comparison site always make sure you've selected the option to show all available tariffs to get the full picture before making a decision.
Energyhelpline* has a history of good reliability and good feedback on our forum. It pays £17 cashback (once) per switch whether separate gas and electricity or dual fuel.
For a dual fuel switch - getting gas and electricity from one provider - you can get bigger freebies (one per household). Yet don't assume dual fuel is always cheapest. Check whether getting separate gas and electricity can undercut it, as it often can.
By specifically clicking via these special MoneySavingExpert.com links to get to the comparison sites and not going direct, you also get paid the cashback or freebies on top, provided they can switch you (see why they pay). It's usually paid in 45-90 days.
Remember you can still switch if you are in debt with your supplier. This debt will follow you to the new supplier.
If you've less than £500 debt per fuel, you can still switch supplier.
If you rent your home, you can also save £100s by switching, especially if you've never switched. You don't need to own the property to do it, you're free to switch providing you pay the energy supplier directly.
You should check your tenancy agreement to see what it says about switching. But even if your contract bans it, Ofgem's guidance states that if you pay the energy bill, you're still entitled to change supplier.
If you move in to a new home and want to know 'who supplies my gas?' Check with your landlord. The property may already be supplied on a more expensive, standard tariff. You can still compare on Cheap Energy Club, even without the former occupants' bills.
We'd love to hear your experiences of switching as a renter on the Switching when renting forum discussion, especially if you've challenged your landlord.
Tenants can also print out our factsheet to give to landlords. It explains the rights that renters have to switch energy supplier, but in the meantime here are some pointers...
Pay the energy company directly? You CAN switch supplier
This is because you have a contract directly with the energy supplier. You don't need to get permission from your landlord to do this, but it's a good idea to let them know in writing so they're aware. It is worth checking your tenancy agreement just in case it is a breach. If it is, talk to your landlord.
My tenancy agreement says I can't switch, help!
Even if you pay energy bills to the supplier, but your tenancy agreement says you can't switch, challenge it. Preventing a tenant from changing energy suppliers may be viewed as an unfair term in a tenancy agreement. Speak to Citizens Advice to see if it can help.
If there's a default supplier clause in the tenancy agreement - where a landlord has a tie-in with a particular supplier - Ofgem says you can still switch.
Ofgem's guidance states: "If a tenant is directly responsible for paying the gas and/or electricity bills, they have the right to choose their own energy supplier and the landlord or letting agent should not unreasonably prevent this."¯ See the Ofgem website for more.
Landlord says you can't ditch supplier? Try a cheaper tariff
If your landlord won't budge, and you don't want the hassle of challenging it, ask if you can be switched to a cheaper tariff with the same energy supplier. If the landlord allows this (here's hoping they will), you'll start paying the cheaper prices the same day you switch.
You may be able to switch from a prepay to a standard meter
If you've got a prepay meter and you're renting, you can still switch your energy supplier, providing you pay the company directly (check your tenancy agreement too - though if it says you can't switch, challenge it).
If you want to change the meter itself (perhaps you're changing a prepaid to a standard meter), then it's best to get written permission from your landlord first.
This is because it could be seen as changing the property from its original condition, unless you arrange to change the meter back at the end of the tenancy. The supplier may charge to do this (see below) so check first.
You may be eligible for free insulation or a free boiler
Tenants can also get free insulation and boilers, as long as they meet suppliers' eligibility criteria and have permission from their landlord.
You may be able to qualify if:
- You get tax credits and have a household income of less than £15,860 OR
- You receive income-based benefits, such as pension credit or income support, and you've either, children, a disabled person in the household or are over 60. Full help in the Free Insulation and Boilers guide.
The very cheapest energy tariffs are online deals for those who have credit meters, or normal, standard meters in other words. They measure your usage, then you receive a bill or pay by direct debit afterwards, rather than paying in advance.
|Typical average prepay meter cost: £1,260||Typical cheapest prepay meter cost: £1,209||Typical cheapest credit meter cost: £920|
|Correct at January 2015. Based on average consumption for a typical house using a 'medium' amount of energy.|
Standard meters offer a wider choice of tariffs including cheap online deals, direct debit discounts and more. It's simply a more competitive marketplace.
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. If you can, ditch and switch to a credit meter.
Before you take the plunge and consider switching to a credit meter, bear in mind:
You may be credit-checked
Providers usually fit prepay meters because they think you're a credit risk. If you're moving into a property with a prepay meter, but have a good credit history, it should be easier to ditch it.
If it was fitted because of payment problems, you'll need to prove your creditworthiness. Any external credit checks via credit agencies will appear on your credit file and may affect future applications. See the Credit Rating guide for full info and tips on how to improve it.
A new meter might cost
Some providers charge up to £60 for swapping to a credit meter. Your savings from moving can be up to £290/year, or even more if you've never switched. So your savings should offset the cost eventually, but of course it may mean finding the cash in the short term.
You may have to pay for the meter if you change supplier
The provider may charge you for the free meter if you switch away to a different supplier before 12 months, so it can recoup its costs.
It can't dictate which tariff you opt for though, so make sure you switch to its cheapest tariff (online tariffs are usually cheapest - see Cheap Gas & Elec for more info).
It's easier to get into fuel debt on a credit meter
Prepayment meters have the advantage of budgeting. You know what you're spending, when you're spending, and it's an incentive to keep energy usage down. While for most the savings from lower rates will outweigh this, it's worth thinking about it before attempting a switch.
How to get a credit meter for free
If you think a credit meter is right for you, follow these steps.
Find out how much your provider will charge to ditch your meter.
As you can see from the table below, some suppliers remove prepay meters and install bill meters for free if you meet their requirements, so it's always worth asking. Almost always though, you'll need to have paid off any existing debt. If you're renting, you may need your landlord's permission first, so check your tenancy agreement first.
How much does your existing provider charge for a meter?
Energy supplier Meter cost What are the requirements? Do you have to stay with the supplier? Free An account review and credit check. You can't be in debt, or have had a debt at your current/previous address in the last 12 months. You can't be in credit of over £50 No, and you don't have to pay for the meter, even if you switch to another supplier after the swap Gas: £60
Can be free, so ask
Your account history is reviewed to ensure you won't build up debt. You can't be in debt on your account. No Gas: £62.90
Your account history is reviewed to ensure you won't build up debt. A credit check is done. It may ask for a deposit which will be returned in 12 months, with interest. No Gas: £52
A credit check and an agreement to set up a direct debit. No Free No credit check, but you must repay any outstanding debt first. No Free A credit check. No Correct at January 2015.
Please note: Switching to credit meters is at your supplier's discretion, so please tell us about your experience in the forum discussion.
Do you receive benefits or have a medical condition?
If you haven't been able to get a credit meter for free and fit into either of these two groups, it may still be possible to swap.
Get certain benefits? A Government scheme, Fuel Direct, lets you pay your bills directly from your benefit allowance. To be eligible for the scheme you have to be be in debt to your energy supplier for £71 or more, and receive certain benefits (see the site for these).
A set amount of £3.60 can be deducted to cover arrears, and an extra amount would be taken on top of this to cover your current consumption. Energy suppliers may agree to remove a prepay meter if you agree to sign up to Fuel Direct. None have confirmed this and they say it's decided on a case-by-case basis, but it's worth a try.
Medical condition? According to Consumer Focus, if you have mobility problems or if you are reliant on electricity for medical reasons, eg, to run breathing apparatus, you may be able to get your prepay meter removed.
Threaten to leave if it isn't free.
If you've passed the credit checks which should, in theory, make you a desirable customer, but are still being asked to pay for removal of the meter, threaten to switch to another meter provider. Some suppliers may waive the charge to keep your custom.
Move to a provider that will give you a credit meter for free.
If you can't get a free meter from your own provider, consider switching to get a prepay tariff with one of the suppliers that does offer free credit meters.
However, Ofgem rules state that if you have more than £500 debt per fuel with a supplier, you can be stopped from switching.
Remember, there's no guarantee that if you do switch to another company, it will then allow you to get a credit meter. So if you're going to do this, use the chart above in conjunction with finding a cheap prepay provider. This will at least ensure you won't end up paying a lot more on prepay if you don't ditch the meter.
If you're a new customer, it may be best to wait a few months to build up your payment history with the company.
Ditched your prepay meter? Tell us how it went!
Is it worth paying for a credit meter?
If you've tried everything to get a free credit meter and can't, it still may be worth paying, though it's NOT worth getting into debt for.
The cheapest prepayment meter tariff costs, on average, £1,210/year. Yet the cheapest tariff for credit meter customers is currently around £920/year, a saving of £290. Balance the saving with the cost of swapping meter to help you decide.
As a rule of thumb, if you'll live there over two years and you're not struggling financially, it can be worth paying for a credit meter.
Never had a credit meter before? Quick tips
Credit meters are usually cheaper than prepayment meters, but it takes more effort to stay on top of bills. When you switch over, make sure you do the following:
Once you've switched, ensure you're on the cheapest tariff
Don't assume you're on the cheapest tariff. In fact, it's likely the energy company will put you on a costly one. If you have to stick with one supplier to avoid paying for the meter, speak to it to ensure you're on the cheapest tariff. Or do a comparison looking only at that provider.
If not, then you need to do a full market comparison - the overall winner depends on where you live and how much energy you use. To speedily find it and get cashback, see the full Cheap Gas & Elec guide.
Every time you receive a bill, do a meter reading
Don't rely on your energy provider's estimates, these are often way out. If it's under-billing, you'll have a big whack to pay at the end of the year. If it's over-billing, then it's unfairly got your cash.
If your direct debit is way off kilter, call up and request it's changed. You have a range of rights to ensure it's correct. See the full Energy Direct Debits guide for template letters to help.
Paying by direct debit is much cheaper
Pay by direct debit and it means you won't miss any bills. Plus you can get a discount of up to £90/year, though make sure you send regular meter readings so it's set at an accurate amount.
If you're struggling to pay, speak to your provider
Three providers (see links below) offer an Energy Trust scheme for their account holders in hardship, to help cover energy arrears and sometimes other essential household items.
Essential items are covered by Further Assistance Payments and can include white goods, boiler repairs or funeral costs. Those who live in a home supplied by the provider, but are not account holders, can only apply for Further Assistance Payments.
You need to complete a full income and expenditure budget sheet along with proof of your income, give details on how your arrears have built up, eg, due to illness or redundancy, and say how the grant will help you.
It can take several weeks to process your claim but it can give £1,000+ in support.
Energy suppliers are obliged to help those in hardship. One way they do it is by providing the Warm Home Discount. Essentially it's a £140 discount on your electricity bill, if you qualify, during winter 2014/2015.
The overall scheme requires suppliers, by law, to help vulnerable customers pay for energy. It's available for customers who receive pension credit, so if this applies to you and you've a prepay meter, you can get it too. The final decision rests with suppliers - so call up and find out what your supplier will offer you.
For full help on getting free cash to help pay utility arrears, or freebies to cut energy bills, see our Housing and Energy Grants guide.
You can also make significant savings simply by making sure you use your prepay meter in the right way. Here are a few top tips:
Use less energy
It's not just who you pay, but how much you use. Cutting energy is a mix of big and little things.
Turn down the thermostat and wear jumpers, turn lights off when you leave a room, use energy-saving light bulbs, defrost the fridge and check it's not on too high, don't leave electrical goods on standby.
Don't use emergency credit too often
Most suppliers provide around £6-10 emergency credit after your top-up runs out. But when you dip into the emergency credit it doesn't charge you the standing charge (the fixed charge you pay daily just to be connected), so the next time you top up you have to play catch-up, which can throw your budgeting out.
Going away? Make sure you top up enough
If you're going away, you need to leave enough credit on the meter to cover the daily standing charge, even if usage will be low. Otherwise you may find your credit runs out and appliances switch off while you're gone.
Moved house? Tell your supplier immediately
If you've moved into a home with a prepayment meter, tell the existing supplier immediately and don't use the old tenant's top-up card.
Otherwise you may end up having to pay someone else's debt just to get an energy supply. The supplier must, under a code of conduct, reset the meter as soon as reasonably possible.
Ignore doorstep sellers
There have been previous scams involving doorstep sellers selling fraudulent top-up cards. The cards were normally sold in £50 denominations for the price of £25. They didn't work so it was totally wasted cash.
Top up before price hikes
This depends on your provider. But when British Gas, for example, last hiked prices, the price charged by the meter didn't increase until the first time you topped up after the hike. Anything used before that first top-up was charged at the old rate. As there is usually a maximum top-up, the benefit of this will be limited.
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