Prepayment meters are a type of energy payment system in which users place the credit on their account before using it rather than getting invoices for their usage.
This allows clients to better manage their energy consumption and finances than waiting for quarterly or monthly payments.
According to the energy regulator Ofgem, prepayment meters are now being used by approximately 16% of all consumers in the UK.
Prepayment energy meters are frequently placed to aid consumers in better debt management and financial planning.
In the UK, if you have a prepayment meter in your home, it means you pay for your gas or electricity before you use it – on a pay-as-you-go basis.
This is actually achieved by purchasing credit, typically with a key or smart card, and adding it to the meter.
The credit on the meter is consumed as you consume gas or electricity. This is quite different from the usual billing system where you pay monthly or quarterly.
In other words, prepayment allows you to top up credit to access energy supply. The top-ups function in a variety of ways. You might have to take a smartcard, token, or key to a store.
This is why a prepayment meter may be referred to as an electric key meter or a gas key meter.
You can top up your energy or gas meters at any PayPoint or Payzone location, as well as at the Post Office.
Many providers now provide prepayment top-up through text or apps.
This is handier because this saves you from leaving the house to top up your power or gas credit which means you can do it any time 24/7.
Which energy company is the cheapest prepayment energy?
There is no particular cheapest supplier to name because of the amount that you pay, how much your cap is, or which vendors are available to you, it all depends on a number of varying factors such as your location, weather conditions, etc.
If you have accumulated significant fuel arrears and owe your energy provider money, it’s likely that they will compel you to use a prepayment meter.
According to some of the most recent reports the top energy suppliers that offer the cheapest prepayment energy rates still exist.
Several of those are as follows:
- E 1 Year Fixed Price 2017 Smart.
Average annual cost: £986
- Spark Energy Spark Protected
Average annual cost: £1000
- Bristol Energy Standard Variable Tariff Paper Billing
Average annual cost: £1010
- EDF Energy Blue+Fixed Prepay
Average annual cost: £1011
- British Gas Standard
Average annual cost: £1018
Can I switch to a standard meter or smart meter?
If you are availing prepayment energy plan, there are very few switching options left for you. The option of switching to a different sort of meter is not available to everyone.
Additionally, individuals who qualify might have to make a payment for it. Most of the time, the main six suppliers don’t charge their clients to switch from a prepayment meter to a direct debit.
There are no fees associated with switching from prepayment to credit meters among the Big Six companies.
However, many will want a debt-free energy account, and some may perform a credit check to see whether you qualify for a direct debit plan. To get things started, get in touch with your supplier.
For the removal of a prepayment meter and the installation of a new credit meter, some of the smaller suppliers might impose a minor cost.
However, paying via direct debit will probably result in long-term cost savings on your energy plan with a normal meter.
Before you make a switch, you need to get permission from your landlord as well.
The simplest explanation for this is that prepayment energy meters are typically put in households of energy consumers who fall behind on their payments and accumulate debt.
They do this to make it easier for them to manage their spending.
Prepayment meters are probably something you may encounter if you’re renting any property.
These meters are installed by landlords to eliminate any possible tenant risk.
Pros of prepayment metres:
- You still have the freedom to change providers.
- Allows you to control how much energy you use.
- In the event that you run out of credit, your meter is pre-loaded with “Emergency Credit.”
- Gives you the most feasible option of topping up your energy credit from your phone.
- You avoid unexpected energy costs.
Cons of prepayment metres:
- The unit rates are comparatively pricy
- Constant check and balance of your credit
- The number of tariffs to opt for gets limited
- At times, it gets inconvenient to recharge or top-up
- Older meters require manual updating following price changes, so you can be paying too much or too little for a while.
- You lose energy supply if your emergency credit reduces to zero
It’s crucial that you register with the energy provider as the new account holder if you’ve recently moved into a new residence with a prepayment meter.
If you don’t, you can find yourself paying the incorrect rates because the prior occupant might owe the energy provider money.
It’s a good idea to shop around once you’ve signed up as the new account holder to make sure you’re on the most affordable prepayment meter pricing.