All homes in Britain will have energy meters telling users how much they’ve spent fitted between 2012 and 2020, the Government announced today.

The Smart Meters, as they’ll be known, to be installed by energy companies, will mean the end of estimated bills and hopefully the end of overcharging. Until then, it’s vital you provide regular meter readings to pay for no more than what you've used.

Currently, gas and electricity meters only show the number of units of energy you’ve used which makes no practical sense to the average person.

The new meters, already installed in some homes as part of a trial, will give an up-to-date pounds and pence indication of your energy consumption to keep track of spending and ensure you’re billed for the correct amount.

Millions of households pay needlessly-inflated energy bills because providers estimate the amount of power used.

In addition, energy companies regularly collect more from direct debit payments (DD) than the energy used. We highlighted the problem last December, while, in March, consumer lobby group Which? said energy companies were effectively getting interest-free loans from consumers by inflating DD requests.

Archna Luthra, energy analyst at MoneySavingExpert.com, says: "It’s nice to see the Government finally doing something about nightmarish inaccurate billing. However, 2020 is a long way off. In the meantime, consumers should provide their supplier with regular meter readings and ensure their direct debit is in line with their usage."

Energy and Climate Change Secretary Ed Miliband says: "The meters most of us have in our homes were designed for a different age, before climate change. Now we need to get smarter with our energy."