Martin Lewis WARNING: The 'top up prepay meters before April' trick may NOT now work for all
Update Thursday 24 March.
I wanted to write this personally, as unfortunately information we were given by energy firms and the regulator no longer looks watertight and this is about prepayment meters, which many vulnerable customers have. That means even slight changes, amidst this cost of living crisis, are crucial. Below is the latest detailed information on when you can and when you can’t beat the price hike by topping up before the 1 April deadline, as well as a video where I explain the concept…
Video explainer: filmed Tuesday 29 March
This is all about the 'max top-up tip'
A few weeks ago, we said that if you top up a non-smart prepayment meter before the 1 April's 54% energy price cap rise, you will be charged at the rate on the day you top up, until you top up again.
We had written confirmation of this from all major firms (except Scottish Power who disagreed) and the regulator, Ofgem. The obvious tip therefore – for anyone who isn't in energy debt and could afford it – was to max your top-up before 1 April and not top up again until it was all used. That way, you could keep using energy at the lower price as long into April as possible. Again, that this would work was confirmed by the regulator.
This information is now less certain
At the time, we reported Scottish Power's rejection of this tip to Ofgem to see if it was breaking any rules. Ofgem has been investigating, and it has now got back to us with some surprising findings.
Separately, we contacted E.on after some MSE users reported that it had given them contradictory information to what we'd said. It then gave us a statement seemingly at odds with its original one and started to say that any energy used in April would be charged at April's rate regardless.
I discussed this with the regulator on Tuesday 22 March, and wrote provisional findings then as I wanted to get the information out as quickly as possible that the tip will not work in as many areas as we had first thought. We gave them a deadline of today for cast-iron information...
Update Thursday 24 March: What we know (and what we don't)
After a meeting this morning, sadly we don't have that cast-iron info, and it's not going to happen. So let me take you through the three key points.
1. This 'max top-up tip' will NOT work with Scottish Power. This has always been the situation, and there is no change. You will pay the new rates from 1 April even if you don't top up until later. Scottish Power has said it will simply claw back the money via the meter at that point.
The regulator has told us there is nothing in the licence conditions that prevents firms from doing this.
2. The 'max top-up tip' MAY work for other major suppliers' non-smart prepay ELECTRICITY meters. We originally had double-confirmed with all other suppliers that the tip would work – but after a meeting with the regulator, now we're hearing that a common position is "it will work, but if it costs them too much money, they reserve the right to back charge on this".
And that's as good as it gets, different firms have different attitudes. I think it's most likely to work with British Gas (which tweeted it would), Octopus, Shell Energy and Bulb, which have been pretty clear to us that they currently don't plan to claw back the extra, though none promise it. It's least likely to work with E.on, which backtracked on its original answer, although it now seems to have softened.
Should you still try the top-up tip?
If your firm allows it to happen, you'll keep the current price well into April and possibly beyond, depending on how much you top up – effectively cutting a third off your energy costs, which can be substantial.
If it decides not to allow it, you'll be using energy at the new rates from 1 April as you would've done anyway, so there is no net extra cost – there's just no gain.
The big consideration is cash flow. As you'll need to find the cash now rather than pay later when needed – if that's a big issue, don't do it (or only do a moderate amount).
How to try this as safely as possible
- Take a photo of your meter reading on 31 March. If you top up on, say, 25 March and don't do it again until 16 April – hopefully you'll pay the cheap rate until then. If not, and the firm decides it will charge the new rate from 1 April, it will likely estimate how much of your usage over the period was at the higher rate, as meters don't usually keep day-by-day records.
So photograph the meter reading on 31 March, and email it to yourself with a date stamp, so if the firm estimates too much, you can counter it.
- Be prepared that future units may be used quickly. In practice, you will in most cases continue to pay the cheap rate until you top up again. The key question is what happens then. The firm could argue you owe it the difference.
Scottish Power, the only firm that will definitely claim back this difference, says it will do it by charging a special "debt recovery rate" to the meter until it recovers what is owed.
If others follow suit, you need to be prepared for that to happen (again, in total you will pay the same, this is all about cash flow) as it will mean you see credit on your meter used up quicker than otherwise.
The other possible option (they haven't said it, but it seems possible) is they could send you a bill for the difference in future.
3. It is unlikely to work for GAS with any supplier. We were told new technical information by the regulator on Tuesday 22 March, on the back of our Scottish Power complaint.
While all suppliers (barring Scottish Power and more recently E.on) had confirmed to us that the rate that applies is the rate on your last top-up, it seems there is a technical gremlin that means it won't in practice.
Gas meters are made by Siemens, and while they don't record what the date of usage is, the key or card that people use to top them up can be preloaded with both current and new prices in advance of 1 April. Which means that on 1 April, the rate the meter charges for gas can change even without them being topped up.
So it is very unlikely to work on gas meters – though Octopus has told us it isn't increasing its price for prepay customers until 21 April anyway, with the new rate info sent to the top-up keys or cards two to three weeks before that, so you may still be able to top up before then.
If you've already topped up and now regret it – ask for a refund
There is no principle right to a refund. But if you've already topped up and now regret it, possibly as it'll cause you a cash flow issue and you're not sure you'll bag the cheaper rates, then contact your energy firm and politely ask them if you can get a refund for some of it. They're not obligated to give you one, but we're hearing warm noises from a few firms that they will refund in the right circumstances (we're compiled a firm-by-firm table below and are just waiting for a few answers). The supplier will probably ask for a picture of your meter as part of the process.
Can you get a refund?
Green Energy UK
Ovo Energy (via its prepayment brand Boost)
|Yes, but only if you upgrade to a smart meter|
I'm really sorry about this
My team and I have been rigorously researching this. And we checked the answers from suppliers and the regulator before giving the information out. We checked again before I gave it out in my show, asking suppliers to confirm it was correct, and asking the regulator to give us confirmation in writing.
I'm gutted to have now discovered that in some cases that information was duff. The fact is, on gas meters it seems no one had worked out that it couldn't work (we've had apologies from some firms that told us it would). On behalf of both me and MSE, I'm sorry. Diligent research is what we pride ourselves on.
As one of the external information providers said to me off the record: "We are in unprecedented times right now, everyone is firefighting. This is a more complex issue than any of us thought, and in these times no one clocked the extra elements."
What does Ofgem say?
Ofgem told my team that this was more complex than it originally thought, and it has now spoken to suppliers to get to the bottom of the matter. It provided the following clarification.
A spokesperson said: "This is a complex area. Suppliers can have different approaches, but we expect them to treat their customers fairly, be transparent about how their charges for consumption are calculated, and take account of customer ability to pay. Customers should speak to their supplier to understand how they may be affected."