Prepayment meters and pay as you go energy

Prepayment meters are a type of home energy meter that requires users to pay for energy before By using it. This “pay as you go” energy is used with a smart card, a token or a key that can be recharged in a store or via a smartphone application.
In 2019, around 4.3 million people in the UK had a prepaid energy meter, according to Ofgem. Find out how they work and how to switch from a prepayment meter to a regular meter.
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How do prepayment meters work?
With a prepaid meter, you have to pay for your gas and electricity in advance. Prepaid meters use power as you go like some cell phones – you have to top up with credit to get your gas and electricity.
Refills work in different ways. You may have a smart card, token, or key that you need to bring to a store. This is why you might hear a prepayment meter called an electric key meter or gas key meter. You can recharge electricity or gas meters at recognized PayPoint or Payzone stores, or at the post office.
Some older prepayment meters work with coins, which means you put money directly into the meter itself (this is becoming increasingly rare).
Many providers now offer prepayment recharge by SMS, app, phone or online. This can be more convenient because there is no need to leave the house to recharge your electricity or gas, and it means you can add more energy at any time of the day or night.
Can I switch to a cheaper prepaid energy plan?
Yes. Almost all providers have at least one prepayment rate available, and just like regular meters, some plans are cheaper than others. It’s worth checking out if you can switch to a prepaid meter plan to save money.
You can compare prepaid meter deals with Uswitch now. Simply select “Prepayment Meter” when asked how you pay for your energy.
Current cheapest prepayment meter offers from Usswitch
Based on the average bill amount for an average energy user with a dual fuel prepayment plan, and averaged across all regions. This information is updated hourly with the energy plans available to pass through Uswitch. To appear in this table, plans must be available in at least 7 of the 14 regions.
Can I switch from a prepaid meter to a standard meter?
Yes, with a few caveats (see below). First of all, it’s important to understand why you might want to change your meter.
Prepaid energy plans are among the least competitive on the market, which means that if you stick with a prepaid meter, you will have fewer plans to choose from if you want to switch up and save money on your energy bills. ‘energy.
It is possible to replace your prepayment meter with a credit meter or smart meter, although this sometimes comes at a cost.
The good news is, if your current provider is in the Big Six and you’re eligible for a credit meter, you can change it for free.
Before changing your meter, your supplier will likely require certain conditions to be met. These include that your account is debt free and in some cases the account holder passes a credit check.
If you are a tenant, please note that you will need permission from the landlord to change the meter.
If your current provider charges for switching from a prepayment to a credit meter, you’re not stuck – you can always switch to a cheaper prepayment plan from another provider. Your new supplier may even be able to trade in your meter at no cost.
Why is my accommodation equipped with a prepayment meter?
Prepayment energy meters are typically installed in homes that have indebted to their energy supplier at some point, to help them manage their debt and budget more effectively.
Some landlords also like to have them installed in their rental properties to try and reduce the risk of their tenants in debt.
If you have to switch to a prepaid meter because you are in debt to your energy supplier, you will pay off your debt as you pay for the gas and electricity you use.
This means that in addition to paying the unit rate for the energy you use, you will pay a little extra to go towards what you owe.
How to take a prepayment meter reading
To get a reading of your prepaid meter, you will usually need to press a button on the meter (it is sometimes blue).
This will change the display from the remaining credit display to the actual reading display. From there it’s like taking a normal meter reading. Check out our video guide to meter readings below:
What are the advantages and disadvantages of prepayment meters?
When it comes to prepayment meters, the disadvantages usually outweigh the advantages.
The advantages of prepayment meters include:
- help customers manage their debt and energy consumption;
- avoid unexpected big bills.
The disadvantages of prepayment meters include:
- above-average costs for your gas and electricity;
- the best energy offers on the market are not available to prepayment meter customers;
- they can be annoying because you have to go out to recharge electricity or gas keys and smart cards (if your supplier does not offer application recharges);
- if you cannot go to a store to recharge your electricity or gas, your energy may be temporarily cut off;
- Older meters need to have their prices updated manually after price increases or decreases, which can take months. This means you could find yourself paying the old rates and owing a lump sum or overpaying.
I have just moved into a house with a prepaid meter, what should I do?
If you have moved into a new home that has a prepaid meter, it is essential that you register with the energy company as the new account holder. If you don’t, you could end up paying the wrong rates because the previous occupant could be in debt to the energy supplier.
Once you’ve signed up as a new account holder, it’s a good idea to shop around to make sure you’re getting the cheapest prepaid meter rate for you.
Different types of prepayment meters
There are three main types of prepayment meters: key meters, smart card meters, and smart prepayment meters. The first two work very similarly, and smart prepayment meters work slightly differently.
Gas or electricity key meter vs smart card meter
A keyed gas or electricity meter uses a special electronic key with your tariff information. A smart card sends your latest information to your provider when it is recharged.
Whatever type of prepayment meter you have, you need to make sure you know how to top it up. The last thing you want is your electricity to go out or your gas supply to be cut off.
You may need to bring your gas or electricity meter key or card to a store to recharge. Make a list of the nearest stores and post offices and their hours of operation. You should also pay attention to holiday periods and top up your key or card with a bit more before public holidays and other vacation periods when top up can be difficult. Most prepaid meters have an emergency credit budget that you can use, such as overdraft, but it’s limited.
If you lose your prepaid meter key or smart card, don’t worry. You can simply contact your provider to get a new one, but in the meantime your provider should be able to authorize a temporary card with your nearest PayPoint, PayZone, or post office. If this is not possible, you may need an emergency call which will incur a charge. When moving into a property with a prepaid meter, you should contact your provider and clarify exactly what happens if you cannot find your card or token.
Smart prepayment meter
Prepaid smart meters, or pay-as-you-go smart meters, are the latest generation of gas and electricity meters.
Prepaid smart meters have the same functionality as standard smart meters, allowing you to view your usage information at any time using the home display. It can help you manage your gas and electricity usage and find ways to cut and save on your bills.
These modern prepaid meters are also more likely to have smart features to facilitate recharging of electricity and gas. You can usually top up a smart meter online or through an app to save yourself the trouble of leaving the house. Once you fill up on electricity or gas on your smart meter, the credit will be added remotely, so you don’t have to do anything with your meter.
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Want to switch to a cheaper offer? Run an energy comparison to get started.