Is a prepayment energy meter right for you?

A prepayment meter can be a useful tool to help you keep on top of your gas and electric use and manage your household budget. 

From April 2024, pay-as-you-go rates are the cheapest on average for price-capped tariffs.

That doesn't necessarily make them the cheapest way for you to pay though, as there might be cheaper fixed direct debit tariffs, while there's very limited choice of fixed prepayment tariffs.

While some homes have always had a top-up prepayment meter, other customers have had one installed by their energy supplier after getting into debt on their energy bills. 

Energy suppliers were banned from forcing some customers to have prepayment meters for debt in England, Scotland and Wales. But a few suppliers are now allowed to do this again. Keep reading to find out more.

If you're finding your payments difficult to manage, you may be entitled to help. Read our guide to what to do if you’re struggling to pay your energy bills.

What is a prepayment meter?

With a prepayment meter you pay in advance for the gas and electricity you use, by topping-up your meter with credit. They’re also called:

• pay-as-you-go meters
• prepaid meters
• keypad meters (in Northern Ireland).

If you have a traditional prepayment meter, you’ll usually have a card, key or token that you top-up with credit. You can usually do this at a shop where there’s a PayPoint or PayZone, at a post office, online or by phone. 

Many suppliers now install smart prepayment meters which let you top-up using a smart phone app or online account as well.

Around four million homes in England, Scotland and Wales have pay-as-you-go energy meters. In Northern Ireland, prepaid meters are one of the most common ways of paying for your energy.

Do you live in Northern Ireland? Find out more about Northern Ireland's electricity and gas companies.

How much is the standing charge on a prepayment meter?

At the moment, a price cap applies if you're on a variable tariff (also called default or out-of-contract). For customers in Great Britain, the average rates from 1 April to 30 June 2024 are:

• Average electricity prepayment unit rate: 24p per kWh
• Average electricity prepayment standing charge: 60p per day
• Average gas prepayment unit rate: 6p per kWh
• Average gas standing charge: 31p per day

Most energy tariffs are made up of:

• Standing charges: paid daily for gas and electricity, whether or not you use any gas or electricity
• Unit rates: the amount you pay per kilowatt hour of gas or electricity you use. 

How much you pay in standing charges and unit rates varies between tariffs, energy companies and where you live. 

You can choose between fixed and variable rate prepayment tariffs. Fixed tariffs mean that your standing charge and unit rate won’t change during your contract. Variable tariffs, meanwhile, mean rates can change whenever your energy firms raises or lowers its prices. 

Use our free, independent energy comparison service to compare gas and electricity prices and find the best provider for you.

British Gas prepayment and other prepayment meter suppliers

Not all energy companies accept customers with prepayment meters, but most of the biggest energy firms, including British Gas, EDF Energy, Eon Next, Octopus Energy and Scottish Power offer prepayment meter tariffs. 

There are several firms which only (or mainly) supply prepayment meter customers:

• Boost is part of Ovo Energy. It supplies only pay-as-you-go customers, with smart or traditional prepayment meters. It scored lower in our most recent energy companies ranking than its parent brand, and was joint-second from bottom in our overall ranking.
• E is a Which? Recommended Provider for energy in 2024. It gives £50 loyalty credit to customers who stay with it for a year. 
• Utilita scored only slightly lower than E in our overall energy companies' ranking. Around 95% of its customers have smart meters. 

These aren’t the only providers you can choose from though. Other smaller energy firms offer dedicated pay-as-you-go plans as well.

Here's how the biggest energy suppliers compare for top-up options.

Find out more: 10 tips to save on your energy bills

Can my energy supplier force me to have a prepayment meter?

Prepayment 'should be a last resort for customers in payment difficulty', energy regulator Ofgem said. The rules are the same regardless of whether you have a smart meter or traditional meter.

Energy firms are banned from forcibly installing prepayment meters if you:

• are over 75 and have no support at home
• have children under two living with you
• have severe health issues including a terminal illness 
• are medically dependent on your electricity supply (e.g. for a ventilator) or warm home (e.g. circulatory disease).

Energy suppliers should also not move you to prepayment if you have owed money for less than three months, owe less than £200 per fuel or have agreed a repayment plan. 

Firms must try to contact you at least 10 times and carry out a 'site welfare visit' before making you prepay for energy.

If they do change your meter to prepay, suppliers must give £30 credit per meter. Once you've repaid your debt, your supplier must contact you to check if prepayment is still appropriate. 

The following firms are now allowed, by energy regulator Ofgem, to install prepayment meters without households' permission:

• EDF Energy
• Eon Next
• Octopus Energy
• Scottish Power
• Utilita
• Utility Warehouse.

This is because they have met the regulator's conditions:

• checked whether they broke any of its rules over the past 12 months 
• compensated affected customers and moved them off prepayment.

Other firms still aren't allowed to force you to have a prepayment meter. You can check which energy firms Ofgem permits to install prepayment meters without permission.

Should I get a smart prepayment meter?

A smart prepayment meter means you can top-up online or using an app on your mobile phone or tablet. 

Pros

• You don't have to go to the shop to top-up. 
• But you can still top-up in person if you wish. Credit will be added to your account automatically.
• You'll get a digital display showing how much credit you have left, how much emergency credit is left (and when you've used it up), any debt you have, if your credit is running low. Some also let you top-up, activate emergency credit, see your top-up history, adjust your low credit setting and see the rates you're paying for debt.
• E and Utilita customers with smart meters can access more emergency credit.
• E, E.ON Next and Utilita customers with smart meters get longer friendly credit hours.
• You won't need to get a new meter if you want to change how you pay. This can be done remotely.

Cons

• Some Octopus Energy, Scottish Power and Utility Warehouse prepayment customers will get less emergency credit with a smart meter.
• Your supplier can change the way you pay without changing your meter (though this is less likely to happen if you're already prepaying).

Find out more about smart meters.

Help with winter energy bills for prepayment meter customers

Energy suppliers must offer emergency credit to customers who are struggling to top-up their prepayment meter. This might be because you can’t get to your local shop or you can’t afford to top up. 

Energy companies also have to offer extra prepayment credit for households in vulnerable circumstances while they work out alternative payment arrangements with you.

If you are in debt to your supplier, it must work out a ‘realistic and sustainable’ repayment plan. This could include setting payment rates based on how much you can afford to pay and getting in contact with you proactively. Many suppliers do this already.

Read on for more about emergency credit and find out about more help available if you can't pay your energy bills. 

How much emergency credit can I get?

You can access emergency credit on your prepayment meter when you run out and can't top up. 

It's meant to tide you over until you can top up again. Then you have to pay it back.

How you access it depends on your meter:

• Smart meter customers can press a button on their smart meter in-home display or on the meter itself
• Traditional meter customers can insert the card or key into the meter and press a button.

Some companies are more generous than others in what they offer.

When can I get friendly credit?

Prepayment meters won't cut your electricity supply off if you run out of credit during 'friendly credit' hours. These are typically evenings, weekends and bank holidays.

Friendly credit should still be available if you run out of emergency credit during these times. 

Some energy companies have longer friendly credit hours than others. They also depend on whether you have a traditional or smart prepayment meter.

Several suppliers told us that their traditional gas prepayment meters can't support friendly credit.

Changing from prepayment meter to direct debit

The cheapest energy deals have traditionally been fixed-term tariffs, but there are very few of these available for customers who prepay for energy at the moment.

There's a greater choice of fixed deals for customers who pay by direct debit, though few are likely to save households much money compared with the price cap in the long-term.

If you're still on a fixed deal and do nothing when the contract ends, you'll be switched to your energy company's variable tariff.

Find out more about the differences between fixed and variable tariffs.

If you have a smart prepayment meter, how you pay can be changed without getting a new meter. If you have a traditional prepayment meter, you’ll need a new meter to be able to change your payment method. 

None of the biggest energy suppliers charge to swap from prepayment to standard credit anymore. If you’re with a smaller supplier, check with the company if there’s a fee to change. No energy firm will charge to install smart meters.

Most of the big energy companies will run credit checks before moving you off prepayment. These could be:

• hard credit check -  a full examination of your credit report
• soft credit check - an initial look at certain information on your credit report.

These examinations can show up on your credit file, meaning potential lenders can see it.

Check the table below for other criteria you’ll need to meet to get your prepayment meter changed. They're the same whether you have a traditional or smart prepayment meter. The only difference with a smart meter is that your supplier won't need to visit your home or replace your meter to change how you pay.

Read our guide to improving your credit score if your energy supplier won’t let you switch following a credit check.

If your supplier says it’ll charge a fee to change your meter, you could switch to another supplier that doesn’t, and then get it to change your meter instead.

You can switch supplier as long as you have less than £500 of debt for gas and electricity,  according to the energy regulator Ofgem. Its Debt Assignment Protocol lets you switch to another supplier and repay the debt to it instead, based on your agreement with the new supplier.

If you can’t get rid of your prepayment meter, ask your energy supplier to put you on its cheapest deal for your usage. 

What happens if your prepayment energy supplier closes?

If your energy firm stops trading, you should be able to continue to top-up and use your credit as usual while a new supplier is chosen for you.

Any credit you have should always be honoured, whether you have a smart or traditional pay-as-you-go meter. If you have a smart prepayment meter, your new supplier can get the details of it via the wireless network connecting all smart meters (called the DCC).

If you cannot access your credit, keep proof (such as a photo of your meter, your top-up receipt or a screenshot from an online top-up payment) and contact your supplier. 

Your old supplier is responsible until a new supplier is chosen. When you have a new supplier, it should tell you how to top-up your meter and how its emergency and friendly credit work.

If you are at risk of going off supply, contact Citizens Advice (0808 223 1133 or use its webchat) or Advice Direct in Scotland (0808 800 9060 or use its webchat).

Read more about what to do when your energy supplier closes. 

Prepayment meter problems solved

These are some of the most common problems that prepayment meter customers experience, and how to deal with them.

1. You can't afford to top up

You can get temporary credit. Some suppliers add this to your meter automatically when you run out, while you might need to ask others. If you need extra support, speak to your energy supplier and read our tips for help paying your energy bill.

2. Inaccurate meter readings

If you believe your meter is faulty, take regular readings to help prove your case. If you think it's running fast, try turning off all your appliances and watching the meter; it shouldn't still be recording significant amounts of energy. You can also ask your energy provider to test your meter. 

Find out more in our guide to dealing with a faulty energy meter.

3. Problems with customer service

Try online FAQ sections or online chat if you can, as this can be quicker than phoning. If you have a complaint, check our tips for complaining to your energy firm.