All You Need To Know About Pre-payment Energy Meters

  • Time of issue:2021-07-23 10:36:03
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All You Need To Know About Pre-payment Energy Meters

  • Time of issue:2021-07-23 10:36
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Pre-payment meters are electricity and gas meters that work on a pay-as-you-go basis. While they can help you to budget, they normally work out more expensive than households with standard meters.

Here’s what you need to know about them.

How many UK households use pre-payment meters?

There are around four million households on pre-payment meters in the UK, according to the energy regulator Ofgem. Some homes have always had them. Other households, however, will have had them fitted by suppliers after going into debt on their energy bills.

Landlord often have pre-payment meters fitted for their tenants.

What types are there and how do they work?

There are various types of pre-payment meters. These include key meters, smart card meters and coin-operated meters. A key meter uses an electronic key, sometimes referred to as a token, which contains the customer’s tariff information.

Meanwhile, a smart card meter has a card that sends your latest information through to the supplier when topped up. Coin-operated meters, once common place, are quite rare nowadays. As the name suggests, they are topped up with hard currency such as pound coins.

Where do you go to top up?

Keys and smart cards can be topped up at PayPoint or Payzone shops. Outlets often include newsagents, garages, or at the Post Office. Nowadays, some meters will allow you to buy credit using an app on your phone, by text message, or online.

Smart pre-payment meters are the latest model, allowing you to view usage information at any time via the in-home display. It’ll also show you how much credit you have left. You can top up these meters online or using an app.

Do all the big suppliers accept pre-payment meters?

In the main, yes. Major suppliers such as British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE (now owned and operated by OVO Energy), all offer pre-payment meter tariffs. A few other smaller providers, including Octopus Energy and Bulb, offer them as well. Several companies only supply pre-payment meters, including Boost and Utilia.

What are the pros of pre-payment meters?

They can be a useful way of keeping on top of your energy use and managing your household budget. Just like a pay-as-you-go mobile phone, it’s a straightforward way of choosing when and how to spend your money. Pre-paying for your energy lets you pay small amounts often, and it means you’ll never overpay.

Like a standard meter, you can still switch to a cheaper tariff, although there tends to be less choice of providers and tariffs. And if you want a smart meter, smart pre-payment meters are available.

What are the cons?

Pre-payment meters can be inconvenient if you need to go out to top up keys and smart cards. If you can’t reach a shop to top up, you could run out of credit and your energy will be switched off. What’s more, if you lose your card or key, it can be a hassle getting a temporary one arranged.

According to the consumer help organisation, Citizens Advice, you should try and avoid having a pre-payment meter if running out of credit and having no gas or electricity would cause you a serious problem. For example, if you have a long-term health condition, disability, medical equipment that wouldn’t work without power, or young children.

Pre-payment meters are also more expensive than standard meters, and there is less tariff choice. The best energy deals on the market aren’t usually available to pre-payment customers.

Note also that pre-payment tariffs have a standing charge (usually 25p – 30p a day), in the same way that credit tariffs do. This charge must be paid regardless of whether you use any gas or electricity on any given day, so you need to have credit on your meter to account for it.

If you owe the cost of the standing charge, it will be deducted next time you top up your meter.

Are pre-payment meters dearer than standard meters?

Yes, they are. There may be significant savings to be had by switching from a pre-payment meter and tariff to a credit meter, where you pay in arrears by monthly direct debit. You can find out how much you could save by running comparative quotations on our comparison pages.

Is it possible to switch pre-payment suppliers?

In general, yes. As long as you don’t owe more than £500 for your gas and £500 for your electricity, you can transfer to a different supplier.

Note that your debt will be transferred to your new supplier and you will still have to pay it off.

Can you swap from a pre-payment to a standard meter?

Many suppliers allow customers to move from a pre-payment meter to a standard meter for free. Others may charge you to change meter, so check first.

To move off pre-pay, suppliers normally require you to have paid any outstanding debt on your energy account, and they will also check your credit score. Bear in mind that if you are renting, you will need your landlord’s permission before changing the meter.

Could a supplier force you to move to pre-payment?

If you are struggling to pay your energy bill and get into debt with your supplier or if you are having difficulty paying an agreed repayment plan, your supplier may suggest you have a pre-payment meter installed.

If you refuse this, and if you fail to pay back your debts, a supplier can apply to the court and install a pre-payment meter under a warrant as a last resort.

Can you get a green energy deal with a pre-payment meter?

Yes, renewable energy tariffs are available. For example, Bulb and Octopus Energy offer them for pre-payment meters.

Ofgem sets a maximum charge for each unit of gas and electricity. This is known as the energy price cap and it’s there to help ensure households pay a fair price for their energy.

The current £1,156 a year figure for pre-payment meters is based on a particular level of usage - in other words, what a ‘typical’ customer uses for gas and electricity, averaged across the country.

The cap changes in line with wholesale energy prices. It’s worth noting that the price cap for standard meters is lower, at £1,138.

What if you can’t afford to top up?

Energy suppliers must offer emergency credit to customers who can’t afford to top up their pre-payment meter, or if they can’t get to a shop to buy credit, for example, if they’re self-isolating because of the coronavirus pandemic.

Don’t forget to check you’re receiving all the government benefits you’re entitled to. If you’re on a low income or receiving pension credit, you’ll qualify for the Warm Home Discount, a one-off £140 discount on your electricity bill between October and March.

What if your pre-payment meter is faulty?

According to Citizens Advice, if the screen is blank or showing a message such as ‘error’, ‘call help’ or ‘battery’, there’s probably a fault with the meter. Tell your supplier straight away or you could be left with no energy.

They must send someone out to repair or replace the meter – or fix it remotely - within three hours on a working day, or four hours on a non-working day. If this doesn’t happen, they must pay you £30 compensation.

Source: Evening Standard

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