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Cheap Prepaid Gas & Elec

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cheap prepaid gas & electricity
Sally Francis
Sally Francis | Edited by Martin Lewis
Updated Monthly

If you have a prepaid gas or electric meter, your prices are capped by the regulator. Yet don't be fooled, this already expensive cap increased by a further £106/yr in April on typical use, a third rise in just a year. So, with prices up, act now to save £100s/yr.

Typically the very cheapest tariffs are for those with a credit meter. All the big six energy firms let many switch to a credit meter for free, though even if you can't, there are cheaper prepayment deals available that can help you save. This guide shows you how to change meters or switch energy supplier to potentially save £100s/yr.

In this guide

What are prepayment meters?

Prepayment meters, sometimes called key meters or card meters, are electricity and gas meters that let you pay for your energy on a pay-as-you-go basis, and more than four million UK homes have them.

You top up prepayment meters via a key or card, which you can buy credit for at newsagents, post offices, garages, or sometimes online. While they can help to budget, you usually end up paying more for energy.

According to a report by the Competition and Markets Authority (CMA), prepay customers have access to fewer tariffs, typically pay more for their energy, and are more likely to be in vulnerable circumstances than those paying by other means.

Since 2017, prepayment rates have been capped by regulator Ofgem, limiting what suppliers can charge for gas and electricity, varying by meter type and region. 

Yet over the last 12 months we've seen the level increase three times. 2018 saw the average level rise by £105/yr with a further £106/yr increase taking effect in April. This takes the average prepayment cap to £1,242/year, based on typical use.

Can you switch to a credit meter?

The very cheapest energy tariffs are online deals for those who have credit meters – in other words, standard 'billed' meters. They measure your usage, then you receive a bill or pay by direct debit afterwards, rather than paying in advance.

Typical big six prepay tariff: £1,242/year Typical cheapest prepay tariff: £1,052/year
 Typical cheapest credit tariff: £873/year
Correct at 4 June 2019. Based on national average consumption for a typical house using a 'medium' amount of energy.

Standard meters offer a wider choice of tariffs, including cheap online deals, direct debit discounts and more. It's simply a more competitive marketplace.

Choices are opening up for prepay users, but it's still an outrage that some of society's poorest often pay more for their energy with these meters. So if you can, ditch and switch to a credit meter – usually this involves a credit check and ensuring you've repaid any debt owed to the supplier.

How to switch to a credit meter if you're with a big six supplier, or others that don't charge

If you're with British Gas, EDF, E.on, Npower, Scottish Power or SSE (plus a few others) you can move without being charged. Many smaller providers will charge you to change meter, so always check with yours. 

  • Will they allow you to switch?

    To move off prepay, you'll usually need 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.

    All of the big six suppliers' criteria are detailed in the table below. If you're not with one of the big six, check your supplier's criteria.

SUPPLIER
 ELIGIBILITY CRITERIA TO SWITCH TO A CREDIT METER
 CREDIT CHECK?
Are over 18, pass a credit check and are not in debt with British Gas or another energy supplier - or the amount you owe has been less than £50 for the last 12 months.
 Yes
There's no credit check, however, EDF says you'll usually need to clear any outstanding debt before you can switch. 
 No
E.on says you'll need to pass a credit check.
 Yes
Existing nPower customers need six to nine months' good payment history and can't be in debt. New customers will be credit checked and, if failed, may be asked for a £250 deposit per fuel or to demonstrate a 12 month period of good repayments. Yes
Pass a credit check and assist with an account review from Scottish Power. 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
You can't have any outstanding debt and must pass a credit check. SSE may also ask for a security deposit.
 Yes
Correct at 20 May 2019. 

  • If they let you change, don't then stick with that provider – the real savings come from doing a comparison

    If your provider allows you to switch to a billed meter, suddenly a world of competition and cheap prices is available to you that wasn't before.

    The cheapest prepaid tariff is about £180/yr more expensive than the cheapest billed tariff on the same usage, so here are the two things you need to know once you've a billed meter:

    - There are massive price differences, so do a comparison.     You'll be put on a standard tariff when you move to a billed meter which is still costly, so do a Cheap Energy Club quick & easy comparison to find and switch to your cheapest. Even if you don't want to switch firm, ask your company to put you on its cheapest tariff.

    - Pay by monthly direct debit. The cheapest way to pay is monthly direct debit, so ensure you select that. You'll have to give your supplier regular meter readings (every few months) to keep it accurate though.

  • What if you're unlikely to be able to switch to a credit meter?

    Don't just give up – there are still things you can do, both to save now and to help switch in future.

    - Move to the cheapest prepayment tariff.     Savings aren't as big here, but the cheapest deals will still save you around £190/yr on typical usage, compared to an expensive standard tariff from a big six provider. So do a quick prepay energy comparison and switch to your cheapest. See below for our top picks and how to compare tariffs.

    - (Re)build your credit history. With many providers, the key is ensuring you're free of energy debt. After that, it's also important to make your credit score look as good as possible – see the 35 ways to boost your credit score guide for more help.

How to switch to a credit meter if you're with a supplier that charges you to do so

Some smaller suppliers, including Green Star, do still charge for a credit meter to be installed – it can be as much as £140 for both gas and electricity. And even if some don't charge, they may do if you get one then switch away after that. So, here's what you do...

  • If it's likely you can move, switch to a prepay provider that'll give you a free billed meter

    Why pay when you can get it for free? The first thing to do is switch to a provider that will let you move to a billed meter for free when you ask.

    The main ones that do this are British Gas, EDF, E.on, Shell Energy (formerly First Utility), Npower, Scottish Power and SSE. However, if you're doing it you may as well do a prepay energy comparison to find the cheapest of those, plus you can also earn up to £25 cashback for switching.

    Once the tariff switch is complete, you may need to wait a few months to build up your payment history (another reason doing a prepay comparison first is important), then follow the Switching to a free billed meter info above.

  • What if you're unlikely to be able to switch to a credit meter?

    Don't just give up – there are still things you can do, both to save now and to help switch in future.

    - Move to the cheapest prepayment tariff.     Savings aren't as big here, but the cheapest deals will still save you around £190/yr on typical usage. So do a quick prepay energy comparison and switch to your cheapest – see below for our top picks and how to compare tariffs.

    - (Re)build your credit history. With many providers, the key is ensuring you're free of energy debt. After that, it's also important to make your credit score look as good as possible – see the 35 ways to boost your credit score guide for more help.

Quick questions

  • Will I have to pay for the meter if I change supplier after getting a credit 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 you switch to its cheapest tariff (online tariffs are usually cheapest – see Cheap Gas & Elec for more info).

  • What's to stop me getting into debt on a credit 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.

    While for most the savings from lower rates will outweigh this, it's worth thinking about before deciding to move to a credit meter.

  • Is it worth paying for a credit meter?

    If you've tried everything to get a free credit meter and can't, it still may be worth paying, though it's NOT worth getting into debt for.

    The cheapest prepayment meter tariff costs, on average, a typical £1,052/year. Yet the cheapest tariff for credit meter customers is currently £873/year, a saving of £179/year. Balance the saving with the cost of swapping meters to help you decide.

    As a rule of thumb, if you'll live at your property over two years and you're not struggling financially, it can be worth paying for a credit 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 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 (see the site for these).

      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, eg, to run breathing apparatus, you may be able to get your prepay meter removed.

Never had a credit meter before? Quick tips

Credit meters are usually cheaper than prepayment meters, but it takes more effort to stay on top of bills. When you switch over, make sure you do the following:

  • Once you've switched, ensure you're on the cheapest tariff

    Don't assume you are. In fact, it's likely the energy company will put you on a costly one. If you have to stick with one supplier to avoid paying for the meter, speak to it to ensure you're on the cheapest tariff. Or do a comparison looking only at that provider.

    If not, then you need to do a full market comparison – the overall winner depends on where you live and how much energy you use. To find it speedily and get cashback, use our free Cheap Energy Club.

  • Every time you receive a bill, do a meter reading

    Don't rely on your energy provider's estimates – these are often way out. If it's underbilling, you'll have a big whack to pay at the end of the year. If it's overbilling, then it's got your cash unfairly.

    If your direct debit is way off-kilter, call your supplier and request it's changed. You have a range of rights to ensure it's correct. See the full Energy Direct Debits guide for template letters to help.

  • Paying by direct debit is much cheaper

    Pay by monthly direct debit and it means you won't miss any bills. Plus, you can save up to £90/year compared with other methods, though make sure you send regular meter readings, so it's set at an accurate amount.

  • If you're struggling to pay, speak to your provider

    A few providers (see links below) offer an 'Energy Trust' scheme for their account holders with some, such as British Gas, accepting applications from non-customers too, who are in financial hardship. The funds are designed to help cover energy arrears and sometimes other essential household items.

    Essential items are covered by 'Further Assistance Payments' and can include white goods and boiler repairs. Only those who live in a home supplied by the provider can apply for Further Assistance Payments.

    You need to complete a full income and expenditure budget-sheet, plus give proof of your income and details on how your arrears have built up, eg, owing to illness or redundancy, and say how the grant will help you.

    It can take several weeks to process your claim but you could get £1,000+ in support.

    Links: British Gas Energy Trust / EDF Energy Trust / Npower Energy Fund / E.on Energy Fund / Scottish Power Hardship Fund / Ovo Energy Fund

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

If you want to change from a prepay to a credit meter, then it's best to get written permission from your landlord first.

This is because 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. The supplier may charge to do this so check first.

But you can still (probably) switch energy supplier...

You should check your tenancy agreement to see what it says about switching utility suppliers. But even if your contract bans it, Ofgem's guidance states that if you pay the energy bill, you're still entitled to change supplier (check your tenancy agreement, too – if it says you can't switch, challenge it).

You don't need to get permission from your landlord to do this, but it's a good idea to let them know in writing so they're aware as it will impact future tenants.

If you move in to a new home and want to know 'who supplies my gas?', check with your landlord. The property may already be supplied on a more expensive, standard tariff. You can still compare on Cheap Energy Club, even without the former occupants' bills.

We'd love to hear your experiences of switching as a renter on the Switching when renting forum discussion, especially if you've challenged your landlord.

Tenants can also print out our factsheet to give to landlords. It explains the rights that renters have to switch energy supplier, but in the meantime here are some pointers...

  • 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.

  • Landlord says you can't ditch supplier? Try a cheaper tariff

    If your landlord won't budge, and you don't want the hassle of challenging it, ask if you can be switched to a cheaper tariff with the same energy supplier. If the landlord allows this (here's hoping they will), you'll start paying the cheaper prices the same day you switch.

  • 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 receive income-based benefits, such as pension credit or income support
    • Receive child benefit and earn less than £18,500 as a single claimant with one child (lower limit) or under £39,000/yr as a couple with four or more children (upper limit)
    • You receive other benefits such as Carer's allowance or Disability living allowance

Can't get a credit meter? You can still switch supplier

Just switching prepay tariffs won't be as lucrative as switching to a credit meter, but if getting one isn't an option, many can still cut their energy bills.

Do a quick prepay comparison now (for a full how-to, see below).

THE MARKET'S CHEAPEST DEALS 
Remember! These are average prices. Always do a comparison.

TABLE_CELL_STYLE SUPPLIER
 TARIFF TYPE
 EXIT FEE
 COST/YEAR
 SERVICE FEEDBACK (1)
Typical big six standard prepay tariff
 - Variable - £1,242
 -
Cheapest prepay tariff Nabuh Energy -PAYG Tina  (2) Fixed None £1,052
 - (3)
Cheapest non-prepay tariff  Outfox the Market - One Variable 5.0 Variable None £873

- 10% great

- 76% poor 

(4)
Correct 4 June 2019. All tariffs assume national Ofgem medium usage. Varies by region. (1) For each firm, not tariff, based on MSE poll of 5,042 people, Nov 2018. (2) There are cheaper regional tariffs, full options can be found via our Cheap Energy Club. (3) We don't have any feedback for this provider yet. (4) Based on 316 votes.

How to compare prepay tariffs (and also grab cashback)

You can switch and save on prepaid gas or electric meters. Our Cheap Energy Club tool makes switching as easy as possible and helps you get constantly cheap gas and electricity.

All you need to do is tell it where you live and how much energy you use. Then we'll tell you if you're overpaying on your current deal or if there's a cheaper alternative.

But the best bit is we'll keep monitoring your tariff for you every month to ensure you're always on the best deal. Plus, if we can switch you, you'll usually get £25 cashback.

It's also worth checking out the comparisons below – they offer cashback options, too.

The limitations of comparison sites – they don't always show all tariffs

Bear in mind that some comparison sites by default only show you tariffs you can switch to via them (ie, where they're paid commission). This filters out some results unlike Cheap Energy Club which shows you ALL those available by default and always has done.

If you do use a comparison site, always check you're seeing all available tariffs to get the full picture before making a decision.

Overall top comparison service. £34 cashback per switch.

Energyhelpline* has a history of good reliability and good feedback on our forum. It pays £17 cashback per fuel per switch if you do it online.

Alternative comparison site. £40 wine. 

uSwitch* promises six bottles of wine (worth c.£40) for a dual-fuel switch, i.e. switching both gas and electricity to one provider. Though always check whether getting separate gas and electricity can undercut it, as it sometimes can.

By clicking via these special MoneySavingExpert.com links specifically to get to the comparison sites and not going direct, you also get paid the cashback or freebies on top, provided they can switch you (see why they pay).

Use your prepay meter the right way

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

  • Use less energy

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

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

    For more info, read the Energy Saving Hunt discussion and see the Energy Saving Trust website.

    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.

  • Don't use emergency credit too often

    Most suppliers provide around £5-10 emergency 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, which can throw your budgeting out.

  • Going away? Make sure you top up enough

    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.

  • Moved house? Tell your supplier immediately

    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.

  • Ignore doorstep sellers

    There have been previous scams involving doorstep sellers selling fraudulent top-up cards. The cards were normally sold in £50 denominations for the price of £25. They didn't work, so it was wasted cash.

  • Keep your card safe

    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 (though EDF doesn't do this).

Check if you can get a £140 discount

Energy suppliers are obliged to help those in hardship. One way they do it is by providing the Warm Home Discount, a one-off £140 discount on your electricity bill between October and March. If you're eligible, you'll usually receive a letter each year telling you whether you'll get the discount automatically or if you need to apply for it.

The scheme requires suppliers, by law, to help vulnerable customers pay for energy. It's available for customers who receive pension credit, so if this applies to you and you've a prepay meter, you can get it, too. The final decision rests with suppliers – so call up and find out what your supplier will offer you.

For full help on getting free cash to help pay utility arrears, or freebies to cut energy bills, see our Housing and Energy Grants guide.

How to complain about your energy provider

The energy industry isn't known for having great customer service across the board, and while a provider may be good for some, it can be hell for others. Common prepay problems include faulty cards, incorrect bills and more. It's always worth trying to call your provider first, but if not then…

Free tool if you're having a problem

This tool helps you draft your complaint and manage it too. It's totally free, and offered by a firm called Resolver which we like so much we work with it to help people get complaints justice.

RESOLVER – FREE ENERGY COMPLAINTS TOOL*

If the complaint isn't resolved, Resolver will escalate it to the free Ombudsman Services.

Join the MSE Forum Discussion

Cheap Prepaid Gas & Elec

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You shouldn’t notice any difference and the link will never negatively impact the product. Plus the editorial line (the things we write) is NEVER impacted by these links. We aim to look at all available products. If it isn't possible to get an affiliate link for the top deal, it is still included in exactly the same way, just with a non-paying link. For more details, read How This Site Is Financed.

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