Prepayment energy bills recently fell by 14% with the new price cap that came into effect on 1 April 2024. But with bills still well above pre-pandemic levels, prepayment energy meter tricks can help you keep bills as low as possible.
Households on prepayment meters will now pay £1,643 a year from 1 April to 30 June 2024 following the new price cap announced by Ofgem.
Traditionally, paying for energy with a prepayment meter has been one of the most expensive methods, especially when compared to monthly direct debit.
However, recent changes have made prepayment meter rates the cheapest on average for standard variable price-capped tariffs. Prepayment customers will pay £49 per year less than Direct Debit customers.
Prepayment meters allow you to pay for your energy on a pay-as-you-go basis. This lets you manage and control how and when you pay for the energy you use.
However, a downside of prepayment meters is that when your money runs out, you get cut off from the energy supply. According to Citizens Advice, 3.2 million households ran out of credit on their prepayment meters last year, leaving them in the cold and dark.
Fortunately, this guide explores some tips and tricks to help you keep energy bills as low as possible.
Key Takeaways:
- Reducing your energy use can help you save money.
- Now is the best time to top up your non-smart prepayment meter and benefit from new lower rates.
- Fuel vouchers can help pay for your gas and electricity.
- Now may not be the best time to switch if you’re on the standard price-capped tariff.
- Grants and benefits can help you reduce energy bills and costs.
- Smart meters can make things easier and help you control your usage and spending
Prepayment Energy Meter Tricks (Electric & Gas)
Here are some tricks you can employ to help you reduce your energy bill if you use a prepayment electric or gas meter:
1. Keep Your Energy Use As Low As Possible
This may sound too obvious, but you should aim to reduce your energy use as much as possible.
For example, a great way to do this is to make the most of the zonal heating concept.
This means you turn on the heating only for the “zone” where you spend most of your time instead of heating the whole house.
This is easy to do, for instance, if you use gas central heating, you can easily turn the radiators in all other rooms down using the thermostatic radiator valves.
Ensure you turn off lights when you leave a room and reduce reliance on artificial lighting by opening blinds and curtains during the day to let natural light in.
Unplugging devices that are not in use and switching to more energy-efficient cooking methods, such as microwaves and air fryers, can also help lower your energy consumption and save you money.
2. Top Up Your Prepayment Meter at the Best Times
Prepayment rates recently dropped on April 1 under the new Ofgem price cap, but you may not see the benefit if you did not top up your non-smart prepayment meter after this date.
The new price will update automatically for smart meters, but you need to top up for non-smart prepayment meters to trigger the rate change.
It’s usually advisable to top up as little as possible before a new price cap kicks in so you can start paying the new rate on the day it’s set. Having lots of credit in your meter means you continue paying the older and higher rates until the day you top up.
Prepayment rates for standard customers are currently the cheapest among all tariffs. Therefore, if you’re using a non-smart prepayment meter, top-up as soon as possible, even if it’s just a quid, to get onto the new lower rates!
Want to see the history of the energy price cap over time? See our complete guide here (includes charts and estimates) and also see how much this will impact your appliance running costs.
3. Check If You May Be Eligible for Free Fuel Vouchers
You may be eligible for free fuel vouchers if you have difficulty paying your gas and electricity costs.
To qualify for a free fuel voucher, you’ll need to receive a referral from a local specified organization in your area. This includes food banks, charities, the local council, and the Citizen’s Advice Bureau.
Such organisations aim to help vulnerable residents experiencing financial hardship and are at risk of energy supply disconnection. Fuel voucher eligibility can differ depending on where you reside in the UK.
Possible recipients include families with modest income, people of retirement age, unemployed individuals, and those suffering from a disability or chronic illness.
The free fuel vouchers offer up to £49 or less in credit. The exact amount depends on your circumstances, needs, or location.
4. Switch Energy Supplier/Provider
One of the best prepayment energy meter tricks to save money is to switch your energy supplier or provider.
Under normal conditions, switching to a different energy supplier and moving to a new tariff can save money.
However, there are fewer competitive tariffs to choose from due to current market conditions.
Additionally, prepayment customers on price-capped tariffs currently have the cheapest rates, allowing you to pay £49/year less on average than those paying for their energy by Direct Debit.
If you’re on the standard variable prepay tariff, it’s worth waiting and looking out for more competitive deals to return as energy prices continue to fall.
It’s unlikely you’ll save by switching right now due to the energy market crisis.
5. Utilise Grants and Benefits to Pay Energy Bills
Many energy companies offer schemes and grants to help with home heating and energy costs. These include making your home more energy efficient and offering free boiler checks and upgrades.
An example is the Energy Company Obligation (ECO) scheme. The scheme requires energy suppliers to help households reduce the cost of home heating by fitting energy-saving measures.
Through the Great British Insulation Scheme, you can also get help insulating your home and making it more energy efficient to save money on energy bills.
You can get help if you struggle to top up your prepayment meter or afford your energy bills.
The help you get will depend on the type of energy you use, how you pay, and whether you claim benefits.
If you’re of state pension age, you can receive a one-off payment through the Winter Fuel Payment to help pay for heating.
You should be able to get between £250 to £600 automatically once you reach state pension age. However, sometimes you may need to apply.
The Warm Home Discount Scheme will reopen in October 2024. It allows you to get a one-off £150 discount on your electricity bill.
You can qualify if:
- You’re on a low income
- Have high energy costs or
- You get the guarantee credit element of pension credit.
6. Install A Smart Meter
Installing a smart meter is one of the top prepayment energy meter tricks you can easily implement.
Most energy companies offer free modern smart prepayment meters to UK homes. They’re currently using second-generation models that can be used with solar panels.
With smart meters, you no longer need an engineer to come and replace your replacement meter with a standard one.
Suppliers can change it remotely with a button if you want to switch between prepay and direct debit. This allows you to move to cheaper tariffs when they become available.
Smart meters are also much easier to top up. You can top up online, via text, or an app, meaning you no longer have to worry about going to local top-up points.
With smart meters, you’ll also have more control over your usage and spending. You can check your energy use in real-time on the home display and keep tabs on it more easily.
7. Consider Changing Your Prepayment Meter
Although prepayment meters can help you manage your energy bills, they’re usually more expensive than standard credit meters.
Switching your prepayment meter to a standard meter enables you to access many more different and more competitive energy tariffs.
If you want to pursue this, the easiest way to switch is to talk to your current energy supplier and request an energy meter switch.
Remember that this isn’t always possible, especially if you have accumulated energy debts in the past.
Most big energy suppliers will let you move from a prepayment meter to a standard meter for free. However, they require that you pay off any outstanding debt on your energy and be credit-scored.
Switching to a standard credit meter is worth considering since it will allow you to access more competitive rates when cheaper energy deals return.
Prepayment Energy Meter Tricks FAQ
How Do Prepayment Meters Work?
Most households have post-pay meters, which means they pay for their energy after they have used it.
In the case of a prepayment meter, the opposite is true, you pay for your energy before you use it instead.
Essentially a prepayment meter means you top up your meter similar to PAY-AS-YOU GO mobile sim card deals.
Can I Apply the Prepayment Energy Meter Tricks As A Tenant?
If you’re a tenant, you may need your landlord’s permission to implement some of the prepayment energy meter tricks.
For example, you’ll need the landlord’s written permission to switch from a prepay to a standard meter. It can be considered altering the property unless you have the meter changed back at the end of your tenancy.
If you’re only switching suppliers, you don’t need permission. However, letting them know is a good idea since it can affect future tenants.
What Prepayment Energy Meter Tricks Can I Use If I Can’t Afford to Top Up My Prepayment Meter?
If you are struggling to pay for your energy, the good news is that help is available.
If you can’t afford to top up your meter, start by contacting your supplier as soon as possible.
Ofgem rules require suppliers to offer support. This includes extra credit if you’re in a vulnerable situation and have few options to pay and additional credit as you work out how to pay.
You’ll repay the credit when you next top up and the supplier must work with you to agree on an affordable payment plan.
Things you can ask your supplier include:
- Payment reductions or breaks
- Payments and debt repayments review
- Extra payment time
- Hardship funds access
- Registration for priority service
Many suppliers have also signed up for the UK vulnerability commitment. It requires that the supplier never knowingly disconnect your household energy supply if:
- You have children under the age of six staying at any time of the year.
- You have children under 16 staying from 1 October to 31 March (winter).
- You can’t safeguard your welfare or the welfare of other household members because of health, age, severe financial insecurity, or disability.
You can also get up to 60 days of space from creditors through the Breathing Space Scheme. It’s also called the Debt Respite Scheme, and it allows you to focus on setting up a debt solution and getting debt advice.
All creditors get informed if you apply and are successful. They must stop any enforcement or collection activity but you’ll still need to make regular payments if you can afford to.
Is Energy More Expensive On Prepayment Meters?
Traditionally, prepayment meter users usually pay more than those who pay by direct debit.
Prepaid meters usually feature households struggling to pay for their energy, and the tariff rates tend to be higher.
However, the UK government has taken various steps to end the higher rates.
In July 2023, it made reforms to end the prepayment premium and save over 4 million households around £45 a year on energy bills.
Speaking on the issue, Chancellor of the Exchequer, Jeremy Hunt noted “It’s clearly unfair that those on prepayment meters pay more than others. We are going to put an end to that.”
Following the commitment to end the prepayment premium, the government included a discount for the standing charges of prepayment users.
The discount on electricity (4.5p per day) and gas (6.7p per day) was applied to standing charges until 31 March.
Currently, energy is much cheaper on the price-capped prepayment tariff than other tariffs thanks to Ofgems ‘levelisation policy.’
Prepayment and direct debit customers pay the same standing charge from 1 April 2024 thanks to a levelisation allowance. It allows prepay customers to pay £49 per year less than direct debit customers.
How Do the Average Unit Prices for Prepayment and Direct Debit Compare?
The table below shows a comparison of the average unit rates for gas and electricity for customers paying by prepayment vs direct debit under the new energy price cap and the previous one:
| New prepayment rates from 1 April to 30 June 2024 | New direct debit rates from 1 April to 30 June 2024 | Previous prepayment rates from 1 January to 31 March 2024 | Previous direct debit rates from 1 January to 31 March 2024 | |
| Gas | Unit rate: 5.82p per kWh Standing charge: 31.43p per day | Unit rate: 6.04p per kWh Standing charge: 31.43p per day | Unit rate: 7.24p per kWh Standing charge: 33.32p per day | Unit rate: 7.42p per kilowatt hour (kWh) Standing charge: 29.60p per day |
| Electricity | Unit rate: 23.72p per kWh Standing charge: 60.10p per day | Unit rate: 24.50p per kWh Standing charge: 60.10p per day | Unit rate: 28.17p per kWh Standing charge: 55.53p per day | Unit rate: 28.62p per kWh Standing charge: 53.35p per day |
Final Thoughts on Prepayment Energy Meter Tricks
Prepayment energy meter tricks can come in handy to save you money on energy bills. Living costs are still high despite the drop in energy prices and any strategy to keep bills as low as possible can help your finances go a little further. Currently, repayment users on the standard fixed-capped tariff pay the cheapest rates but you should keep an eye out for better deals as more competitive tariffs return.
Remember, if you’re struggling to top up your prepayment meter, help is available to ensure you can keep the lights and heating on.
Sources and References
- https://www.ofgem.gov.uk/publications/new-energy-price-cap-level-april-june-2024-starts-today#:~:text=Changes%20for%20prepayment%20meter%20or,the%20end%20of%20March%202024.
- https://www.citizensadvice.org.uk/about-us/media-centre/press-releases/millions-left-in-the-cold-and-dark-as-someone-on-a-prepayment-meter-cut-off-every-10-seconds-reveals-citizens-advice/#:~:text=reveals%20Citizens%20Advice-,Millions%20left%20in%20the%20cold%20and%20dark%20as%20someone%20on,10%20seconds%2C%20reveals%20Citizens%20Advice&text=New%20research%20from%20Citizens%20Advice,t%20afford%20to%20top%20up.
- https://www.ofgem.gov.uk/publications/new-energy-price-cap-level-april-june-2024-starts-today#:~:text=Changes%20for%20prepayment%20meter%20or,the%20end%20of%20March%202024.
- https://www.ofgem.gov.uk/information-consumers/energy-advice-households/prepayment-meters-consumer-guidance
- https://www.independent.co.uk/news/uk/home-news/jeremy-hunt-budget-prepayment-energy-bills-b2298926.html