Prepay for your energy? You could keep today's cheaper rates for a little longer – here's how
Many with older prepayment meters could potentially delay the upcoming price hikes and keep the cheaper rates under the current price cap for a little longer. It's all about 'stockpiling' gas and electricity credit before the rates rise. Here's how it works...
Important update Tuesday 22 March. WARNING: This trick may NOT now work for all. Unfortunately information we were given by energy firms and the regulator no longer looks watertight. For full info, see Martin's prepay trick warning. We've left the info below as it was before this new information came to light for reference.
If you've a non-smart prepayment meter, the rates won't change until the first time you top up following a price change, so any credit you've added before then will be charged at the old rates – barring a few exceptions, such as those with Scottish Power or E.on. Also, if you have a smart prepayment meter, this won't work as these meters are updated remotely with the new rates on the day of a price change.
All you need to do is top up as much as you can afford to up to the limits of the meter before Friday 1 April, when prices will change for most, as the price cap (which standard prepayment tariffs must follow) will rise by 54%. However, we appreciate this won't be for everyone as many are struggling right now and won't be able to afford anything.
Don't top up again from 1 April until you've used all the credit you've built up (though do make sure you don't run out), as that will update your meter with the new rates – so if you top up before you need to, all the credit you built up would be charged at the higher rates.
There are no deals to switch to that are meaningfully cheaper than both the current cap and the cap from April, so this loophole is a way to delay the hikes. See Martin's energy bills crisis video briefing for his latest must-knows on the current market.
We double-checked with Ofgem, and the regulator confirmed this trick should work.
An Ofgem spokesperson told us: "Smart prepayment meters update prices automatically – so topping up in advance would not make a difference. With non-smart prepayment meters, the price customers pay is fixed at the point they top up.
"This means that any built-up credit is spent based on the price of energy... [when] that credit was purchased. So a price increase could temporarily be avoided by building up credit in advance, though this would also work the other way if the price went down."
Does this work with all suppliers?
We asked providers to confirm if this would work for their customers, and that they wouldn't try to claw back the difference at a later date.
Supplier | Does it work? |
|---|---|
British Gas | Yes |
Bulb | Yes |
E.on | No |
EDF Energy | Yes |
Green Energy UK | Yes |
Octopus Energy | Yes
|
Ovo Energy (via its prepayment brand Boost) | Yes |
Scottish Power | No
|
Shell Energy | Yes |
SSE | Yes |
Utilita | Yes |
As the table shows, unfortunately this trick won't work with Scottish Power or E.on. However, unlike Scottish Power, which told us upfront that while rates won't update on your meter until after you top up after 1 April, the additional amount you would've paid under the new rates will be recovered at your next annual statement, E.on has seemingly backtracked.
After hearing E.on had been giving different information to customers, it gave us a statement seemingly at odds with its original one and started to say the tip would not work with it.
As this appears to be at odds with what Ofgem told us should happen for those on non-smart prepayment meters, we've reported this to the regulator. We have also reported Scottish Power, and Ofgem told us it is "engaging with Scottish Power in relation to the matter".
If you've already started stockpiling credit for E.on, you won't lose this money – it can still be used for you gas and electricity usage. However, it may be worth topping up a small amount on or shortly after 1 April, to trigger the new rates and avoid any complications in the future.
An E.on spokesperson said: "We answered the specific questions put to us at the time. Had we known exactly how this was going to be interpreted we would have been more detailed in how we explained the complexity of this issue. Nevertheless, it is worth reassuring any customer who has followed the advice given by third parties that they will not be any worse off as a result. We have written to all of our customers setting out how their prices will change. As ever anyone who is struggling to pay for their energy should get in touch to see how we can help."
We've also contacted smaller suppliers to check it works with them and will update this when we hear back. In the meantime, you may want to check directly if you're not with one of the providers we've mentioned above.
What's more, following reports that some MoneySavers were told this trick wouldn't work, we reached out to the firms above to check again that they wouldn't try to reclaim, backdate or otherwise bill for the extra, and so far British Gas, Bulb, EDF, Octopus, Ovo, SSE and Shell Energy have all reiterated that they wouldn't.
What's more, Ofgem told us: "Customers on non-smart prepayment meters building up credit prior to an increase in their tariff under the price cap would not be regarded as ‘underpayment’, but simply a consequence of the non-smart prepayment topping up process. There is no mechanism under the price cap specifically for suppliers to reclaim money associated with customers building up credit in this way."
How exactly does it work and how much can I top up?
Generally when a price change happens, for those with older prepayment meters, the information about the new rates is sent to the terminals where you top up your key or card. This is transferred to the card when you top it up, then to your meter when you next plug it in.
That means you'll only start being charged the new rates once you top up after Friday 1 April. So you could potentially put as much credit on your meter as you can, and then use that for as long as possible – letting you use energy at the current rates and delaying having to pay the much higher rates under the cap from April.
Yet there is a limit on how much you can top up each time, and how much credit your meter can hold. We asked all the big names and they said that usually you can top up between £1 and £49 at a time, while the meter itself can typically hold up to £249 for electricity and up to £999+ for gas (depending on the meter). So to max the trick, you'd have to pay a few visits to the top-up shop.
Struggling to pay or repaying debt? What to do
Prepayment meters are often used to pay back debt that you may have accumulated in the past. If that's you, while there will still be some gain using this trick, be aware that most suppliers will take an additional amount on top of what you use yourself. And some, such as E.on Next, require you to top up weekly if you're repaying debt.
If you're having issues paying for your gas and electricity, our new Struggling with energy bills? guide details all the help available, including when to speak to your provider, what grants and help schemes you may be able to access, how to get free energy and debt advice and freebies and grants to improve your home's energy efficiency, and more.
It's also worth seeing if you can use less to cut bills – our energy saving tips help with the simpler stuff, such as turning your thermostat down and cutting shower time, while our Energy mythbusting guide looks at the less clear-cut questions, such as whether to leave the heating on low all day.
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