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Prepaid gas and electricity

Can you change from prepayment meter to Direct Debit? Plus what extra help is available

Clare Casalis
Clare Casalis | Edited by Andrew Capstick
Updated 22 November 2024

On 1 January, those who pay for their energy on a prepay meter will see their bills rise by 1% on average. If you're struggling to pay, there's help available. Here's what you need to know...

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How do prepayment meters work?

Prepayment meters let you pay for your energy on a pay-as-you-go basis. About four million homes in Britain have them. You top them up online (if you have a smart meter) or via a key or card, which you buy credit for at newsagents, post offices and garages.

Typically, prepay customers have had access to fewer tariffs, but the big advantage of sticking with prepay is if you have problems budgeting.

Prior to the energy crisis, some people could cut energy bills by swapping prepayment meters for standard meters for free, but in July 2023 the Government committed to end the 'prepay premium', and prepay is now the cheapest way to pay if you're on a standard variable price-capped tariff.

Yet before you jump to it, a word of caution... there are rarely any prepay deals. All the big discounts tend to be thrown out to win new Direct Debit customers. So it's highly likely Direct Debit will stay by far the overall cheapest option for people who switch energy tariffs, but for those who don't, it'll be prepay.

Prepayment energy bills will rise by 1% on 1 January 2025

Regulator Ofgem's new Price Cap will come into effect on 1 January 2025, with prepay energy bills rising by 1% on average.

Under the new Price Cap, a typical household on prepay will pay £1,690 a year (currently £1,669/year). Yet what you pay depends on how much you use and where you live. To see how the Price Cap change will affect your bill, see our What will I pay from January? calculator.

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On a prepayment meter and struggling to pay? There's help available

With massive hikes in energy prices over the last two years, many households are struggling with bills right now. Citizens Advice estimates that 1.7 million people in Britain ran out of credit on their prepayment meter last year, and 800,000 people went more than 24 hours without gas and electricity, as they couldn't afford to top up. So make sure you are getting all the support you are entitled to. If you're worried about paying your energy bills – or you're already struggling – don't suffer in silence. There's lots of help out there.

  • All suppliers offer small amounts of emergency credit. Usually £5 to £10 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.

  • Friendly credit prevents you being cut off during certain times of the day or certain days of the week. If you start running out of credit when the shops are closed (for example during evenings, weekends and bank holidays), which stops you being able to top up, you won't be cut off.

  • Many providers have hardship funds to help those in debt. Find out if you can get help through a supplier hardship fund.

What's more, regulator Ofgem has strengthened protections for prepayment customers, requiring suppliers to proactively identify and contact customers that have self-disconnected due to being unable to afford to top up. This includes support for repaying any outstanding standing charges.

For more info, see our full Struggling with energy bills guide.

Not already on prepay? Some households in energy debt can be forced to have one

If you're in energy debt, your supplier may be able to force-fit prepayment meters – but this should be the last resort to avoid disconnecting you, and your supplier should have explored all other options to recover the debt first.

Since November 2023, a new code of practice has been in place for forced prepayment meters, which all suppliers must abide by and is legally enforceable. It sets out the rules for when suppliers can and can't forcibly install a prepayment meter.

British Gas is the only major energy supplier to have not yet met the conditions under the new code to be able to restart forced prepayment meter installations. We'll update this guide if this changes.

Ofgem is reviewing customers that had a prepayment meter installed without permission

Regulator Ofgem's review has, so far, identified more than 2,500 customers that had a prepayment meter installed between 1 January 2022 and 31 January 2023, but shouldn't have. Energy suppliers are in the process of paying compensation to affected customers and the review is ongoing.

If you think your supplier installed a prepayment meter or switched your smart meter to prepayment mode when it shouldn't have, you should contact your supplier, as you may be entitled to compensation. If you need help making your complaint, you can contact Citizens Advice and Advice Direct Scotland. If you need extra support, your complaint can be referred to the Extra Help Unit or Energy Ombudsman.

Got an older, traditional prepayment meter? Check if you can get a smart meter

Most suppliers now offer smart prepayment meters – they're free and offer several benefits if you prepay for your energy: 

  • Smart prepayment meters make it much easier to top up. These meters allow you to top up online, by text, over the phone or via an app. So there's no need to pop to the shops when you're running low to add credit to your card or key. 

  • Suppliers can switch you between prepay and monthly direct debt remotely. You no longer need to have an engineer come out to your house and replace your prepayment meters with standard ones – suppliers can simply change it remotely. So if you are eligible and want to switch to a standard credit meter, this is done with a simple click of the button.

  • You'll be more in control of your usage and spending. You'll be able to see it in 'real time' on your in-home display.

  • It's much easier to check how much credit you have left. The in-home display will also tell you how much credit you have left, so you no longer have to go to the meter to check. Some suppliers also have mobile apps that can talk to your smart meter, so you can check on your phone.

To see if you can get a smart prepayment meter, contact your supplier, or for more info, see our Smart Meters guide.

Can you switch from a prepayment to a standard meter for free?

Most big energy suppliers – British Gas, EDF, Ovo and Scottish Power – will let you move from a prepayment meter to a standard meter for free. Some other suppliers also offer to do it for free, though some may charge, so always check first. If your supplier does charge, you can always consider switching to one that offers it for free.

To move off prepay, nearly all suppliers require you to have paid any outstanding debt on your energy account and be credit scored, so they can see if there's a risk you won't repay. Of the big names, only EDF says it won't credit check you, though it does require you to pay off any debt first. You can sign up to our Credit Club to get your free credit score and check your chances of being able to switch to a credit meter.

  • The big suppliers' eligibility criteria to switch to a standard credit meter

    SUPPLIER
    		 ELIGIBILITY CRITERIA TO SWITCH TO A STANDARD METER
    		 CREDIT CHECK?
    British Gas You'll need to pass a credit check and can't have had more than £50 debt in the last 12 months.
    		 Yes
    E.on You'll need to clear any outstanding debt. Yes
    EDF
    		 There's no credit check, but you'll need to clear any outstanding debt. No
    Octopus Customers are assessed on a case-by-case basis. Customers will need to pay off any debt they may have on the meter and pass a credit check. Yes
    Ovo You'll need to pass a credit check. If you fail the check, it will ask for a security deposit (amount calculated on an individual basis), which will be returned if you leave Ovo. Yes
    Scottish Power Pass a credit check and have an account review. If you fail the check, it may ask for a £150 deposit per fuel, which will be returned after a 12-month period of good repayments. Yes
    Utility Warehouse There's no credit check, but you may be asked for a £200 deposit for each meter. No
    Correct at September 2024.

Check your prepay credit balance and take a final meter reading before being switched

If you do decide, and are approved to get a credit meter, make a note of how much credit you have left before your supplier installs your new credit meter or turns off your smart meter's prepayment setting. Your supplier should transfer any remaining credit to your new account, so it'll go towards your first bill as a credit customer.

If you owe your supplier money (for example from using emergency credit), make a note of this, as your supplier will add this to your first bill.

It's also a good idea to take a final meter reading, and take a photo of the meter, so you have proof of what it says.

Standard prepay prices are cheaper than Direct Debit – but you may still want to switch as fixed deals return 

Under the current Price Cap, prepayment households on standard tariffs pay a typical £1,669 a year, compared to £1,717 a year if you pay by Direct Debit – about £48 LESS.

But the benefit of switching to Direct Debit is that those on standard credit meters generally have access to more fixed deals, which can sometimes offer savings over the Price Cap. So this may be worth looking out for as energy suppliers have started to bring back competitive fixed price contracts. Check our Should I fix? guide or try our Cheap Energy Club comparison tool to see what's currently available.

Or perhaps you just want to switch so you don't have to worry about topping up your meters – though make sure you pay by monthly Direct Debit, as paying on receipt of bills is much more expensive than prepayment.

Quick questions

  • Will I have to pay for the meter if I change supplier after getting a standard meter?

    The provider may charge you for the free meter if you switch away to a different supplier before 12 months have passed, so it can recoup its costs.

    It can't dictate which tariff you opt for though, so make sure to check its cheapest tariff.

  • What's to stop me getting into debt on a standard meter?

    Prepayment meters do have one advantage – they help you budget. You know what you're spending, when you're spending it, and it's an incentive to keep energy usage down.

  • Is it worth paying for a standard meter?

    While most suppliers don't charge for changing your meter, some do. If yours does charge, it's probably not worth switching to a standard meter right now, as prepay customers currently pay £48/year less on average than those paying for their energy by Direct Debit (for the same usage).

    However, those on standard credit meters are likely to benefit from more competitive deals when cheaper fixed energy deals return, so this is worth considering if you're thinking of switching from a prepayment meter.

  • Receive benefits or have a medical condition? You may be able to switch via alternative methods

    If you haven't been able to get a standard credit meter for free and fit into either of these 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 receive certain benefits.

      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 charity Citizens Advice, if you have mobility problems or are reliant on electricity for medical reasons, for example, to run breathing apparatus, you may be able to get your prepay meter removed.

  • How can I improve my credit history for a better shot at getting a standard meter?

    With most providers, the key is ensuring you're free of energy debt. After that, you need to make your credit score look as good as possible – see how to Improve your credit score guide for more help.

Renting? You'll need your landlord's permission to switch meter 

If you want to change from a prepay to a standard meter, then it's best to get written permission from your landlord first. 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, which suppliers may charge you for.

If you just want to switch suppliers, you don't need to get permission from your landlord to do this, but it's a good idea to let them know so they're aware, as it will affect future tenants. However, due to the energy market crisis, it's unlikely you'll be able to save by switching supplier right now.

Quick questions

  • 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.

    Tenants can also print out our factsheet to give to landlords. It explains the rights that renters have to switch energy supplier.

  • 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 live in a property with an EPC rating of E to G and:

    • Someone living at the property qualifies for certain benefits, such as pension credit, universal credit, child benefit (subject to income limit), income support and housing benefit. See the full list of qualifying benefits; OR

    • You live in social housing, or are considered by your local council as being on low income (total household income under £31,000 a year) and vulnerable to the effects of living in a cold home.

Top tips if you have prepayment meters

If you can't switch away from a prepayment meter to save cash, then these tips will help you make sure you use prepay the right way.

  • 1. The simplest way to save is to use less energy

    It's not just how you pay, but how much you use. Cutting energy is a mix of big and little things.

    Turn down the thermostat and wear jumpers, defrost the fridge and check it's not on too high, turn lights off when you leave a room, use energy-saving light bulbs and don't leave electrical goods on standby.

    We've put together a huge list of Energy Saving Tips as well as Energy Mythbusters for loads of ideas and inspiration to help you cut back your energy usage.

    Smart thermostats can also help some save on their energy bills. These gadgets give you greater control over your home's heating, letting you adjust it on the move via a mobile app or online, and set more complicated heating schedules than your traditional thermostat.

    They can be pricey though, so see the Smart Thermostats guide to check if they're right for you.

  • 2. Going away? Remember to top up before you leave

    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.

  • 3. Moved into a home with prepayment meters? Contact the supplier straightaway

    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.

  • 4. Keep your card safe – you can be charged for replacements

    Lose your card and you'll usually be charged around £10 for a replacement. Any top-ups you've already made should be transferred to the new card.

  • 5. How do you top up a prepaid meter?

    If you've got a traditional pay as you go meter, you can top up by taking your gas or electricity key or card to your nearest Payzone or PayPoint, which is usually a local shop, or at the Post Office.

    But if you have a smart pay as you go meter, you can also top it up online, by text, over the phone or via a mobile phone app. Check your supplier's website or contact it for full info.

  • 6. Do you need to take a meter reading from a prepaid meter?

    You don't need to send a meter reading in if you have a prepayment energy meter.

    The purpose of giving a meter reading is to stop your supplier from guessing your usage – with prepayment meters you pay for your energy as you go, so there's no need to supply this.

  • 7. What are the unit rates and standing charges on a prepaid meter?

    The tables below show the average unit rates per kilowatt hour (kWh) and standing charges per day (these vary by region) under the current Price Cap (from 1 October to 31 December 2024) and the new Price Cap (from 1 January to 31 March 2025).

    You can see the full region-by-region unit rates in our Energy Price Cap unit rates guide. 

    What are the standing charges and unit rates for gas and electricity on a prepaid meter?

     

    CURRENT Energy Price Cap rates from 1 October to 31 December 2024

    		 NEW Energy Price Cap rates from 1 January to 31 March 2025
    Gas  Unit rate: 6.01p per kWh

    Standing charge: 31.66p per day

    Unit rate: 6.11p per kWh

    Standing charge: 31.65p per day
    Electricity Unit rate: 23.68p per kWh

    Standing charge: 60.99p per day

    Unit rate: 24.03p per kWh

    Standing charge: 60.97 per day

    Rates and standing charges are averages, which vary by region. Assumes payment by prepayment meter and includes VAT (at 5%).

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