Energy > Guides

Switching from a prepayment meter – what you need to know

Robin Bowman

Robin Bowman
Oct 12, 2016


Almost six million people use prepayment meters in the UK.

This can be for a variety of reasons –they may have had problems keeping up with bills in the past, they may have no credit history or they may choose to prepay for their energy to best monitor its use.

 

What are prepayment meters?

In simplest terms, prepayment meters mean you pay for your energy use upfront.

With a normal meter, you use energy and then the supplier bills you.

In effect, they are extending credit to you, putting what you owe on a tab.

Prepayment is the opposite, you pay first.

The system is no different to a pay as you go phone.

If you have already built up a debt with an energy supplier, then each time you use your prepaid card or token some of the money you paid will be used to pay off some of the debt.

There are various ways to pay, but you normally will be supplied with a card that you add credit to and you introduce this to the gas or electricity meter.

Other ways include buying tokens or a key that you have topped up in various retail outlets using PayPoint and Payzone.

Many suppliers now offer top ups via online accounts or via your mobile via text.  

 

Different types of meters

The two types of prepayment meters are those that use keys and those that use cards, or smart cards.

Both kinds use the key or card to store info and the amount of credit you have loaded

If you run out of credit, there is a small amount of emergency credit available but it won’t last long and you will have what you spend deducted the next time you top up and use the key or card.

 

If I’m a prepay customer, can I still switch supplier?

Very much so.

Not every energy supplier has a prepaid tariff, but the vast majority do.

You can search for and switch to the most economical supplier, in just the same way as a customer on an ordinary meter.

Do not be fooled, just because pre-paid seems different from the rest of the market, there is still a very wide gap between tariffs and energy companies.

Try our energy comparison tool to see which deals are available to you

 

What about moving from a prepayment to a normal meter?

There is nothing to stop you from switching from a prepayment to a normal meter – so long as you meet the criteria.

And you have every good reason to do so because, exactly like pay-as-you-go phones deals, prepayment meters offer poor value.

Not only that, the prepayment market is not competitive like the mainstream market, so you have far fewer plans to choose from.

Before you can switch to a normal meter, and the Big Six suppliers will do usually do this for free, you will need to meet certain criteria.

The fact is, they will want to be as sure as they can be that you’re going to pay your bills.

You will need to have no outstanding bills left unpaid and you may have to pass a credit check.

If you live in rented accommodation, then you will need to check with the landlord that it’s OK to switch the meter.

Some may not allow this because a prepayment meter does stop large debts being run up.

But, of course, you don’t need to stay with the same supplier – you can switch your prepayment meter to a regular one AND switch supplier at the same time.

 

Why might I be better sticking with a prepayment meter?

Well, they certainly help you manage your energy usage and spending on gas and electricity.

You won’t get any nasty surprises when a bill arrives.

That’s the big plus.

 

What are the big disadvantages?

You pay more for your energy use.

You have to make sure you’re topped up and so not in danger of running out of energy to heat your home or to cook with or get hot water.

Some of the older meters have to be adjusted to take account of new prices manually and this can take weeks to get done – so you end up paying an old rate, perhaps building up a debt or paying too much for your energy.

Bottom line – if you do quality, you’ll save money by switching to a regular meter.

And, even if you don’t, you’ll save money by switching to the best prepayment deal.

So shop around by using our comparison tool.