Prepaid gas and electricity

Prepaid gas and electricity

Get a standard meter, plus help if you're struggling to top up

The energy market is in crisis. Energy prices are at all-time highs, and despite the Government capping bills at an average £2,579 a year for a typical prepay household this winter, that's a huge jump from last year. If you're on prepay, there's help available if you're struggling. Or check if you can save a few pounds by switching to a standard credit meter. 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 and pay more for their energy than those that pay by direct debit – though are strong calls from charities and campaigners to change this. Generally, the only 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, or switching prepayment tariff, but due to the ongoing energy crisis, it may not be worth doing right now. 

Prepayment prices are discounted under the energy price guarantee

Prepay energy bills are currently capped at £2,579 a year for a typical home (if you use more, you pay more), under the Government’s energy price guarantee (EPG) scheme.

This was introduced in October 2022 to reduce the impact of record high energy bills. The EPG gives a discount on the gas and electricity unit rates under the energy price cap (£4,358 for prepayment customers), which is technically still in place – though you'll only pay the EPG rate right now.

For more info on the price cap and energy price guarantee, see our What is the energy price cap?What are the price cap unit rates? and  the 'energy price guarantee' guides.

Hundreds of thousands have recently been moved onto prepayment meters due to debt – what are the rules?

Prepayment meters are often used by suppliers to recover debt, and they can force people to switch to them – though this should always be the last resort to avoid disconnecting you. Citizens Advice estimates that about 600,000 people were forced onto a prepayment meter in 2022 because they couldn't afford their energy bills. 

But there are rules around who can be switched to a prepayment meter (for example, if you're not vulnerable) and when. Providers must have taken all reasonable steps to agree alternative repayment of the debt first, and they can only force you on to one if it’s safe, practical and easy for you to use the meter.

It's also worth mentioning, if you have a smart meter, suppliers can remotely switch you to prepayment – though many have said they won't do this right now.

  • Why are prepayment meters more expensive than standard credit meters?

    While the savings are lower right now due to the energy crisis, a typical household on a standard tariff, paying by monthly direct debit, still pays £79 a year less than someone on prepayment.   

    One of the main reasons prepayment meters are more expensive than standard credit meters is simply that they are more effort for the suppliers. Providers prefer to get regular, automatic payments for your energy, which is what you get with direct debit payments on standard credit meters. This is why it's the cheapest way of getting your energy.

    But it's an outrage that some of society's poorest often pay more for their energy because they're on prepayment meters.

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

With massive hikes in energy prices over the last year or so, many households are struggling with bills right now. If you're worried about paying your energy bills this winter – or you're already struggling – don't suffer in silence. There's lots of help out there.

  • Households get £400 to help with fuel costs this winter – if you're on a traditional (non-smart) meter, don't forget to claim it. It's paid monthly (£66 or £67) by your supplier from October 2022 until March 2023 and most households should have received their first four payments. If you're on smart prepayment, it should be credited to your electricity account automatically (though some suppliers let you move it to your gas meter) within five working days of the start of the month. 

    If you have traditional (non-smart) prepayment meters, you'll get a voucher each month, usually sent within 11 working days of the start of the month (by text, email or post), and most let you use it on gas or electricity when you top up as normal – make sure your supplier has your up to date contact info. If you've not got your vouchers, lost them or had one expire, see full prepay voucher help

  • 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.

  • Many suppliers have said they won't collect debt from prepayment customers this winter. See what your supplier is doing to help.

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.

Got an older, traditonal 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, Scottish Power and SSE – 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.

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

    British Gas You'll need to pass a credit check and can't have had more than £50 debt in the last 12 months.
    E.on Not able to offer it at this time. N/A
    There's no credit check, but you'll need to clear any outstanding debt. No
    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 retruned 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
    SSE You can't have any outstanding debt and must pass a credit check. SSE may also ask for a security deposit.
    Correct at 1 Feb 2023.

Swapping to a standard credit meter will only save you a small amount right now

In the past, switching from prepay to a standard credit meter would open a world of competition and cheap prices. Yet now, due to the energy market crisis, it's not as clear cut – there are no cheap fixes for those paying by direct debit, and virtually all households are on their provider's standard tariff, paying very similar rates under the energy price guarantee.  

However, there is still a small benefit. Under the energy price guarantee, a typical dual-fuel household pays £2,579/year on prepay, compared to £2,500/year for someone paying by monthly direct debit.

If you think that's worthwhile, or perhaps you want to switch so you don't have to worry about topping up your meters, it could still be worth doing – though make sure you pay by monthly direct debit, as paying on receipt of bills is more expensive than a prepayment.

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.

  • 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.

  • 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.

  • 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.

  • 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.

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