Are prepayment meters costing consumers more?

Are prepayment meters adding to consumer woe?

With hundreds of thousands of people across the UK falling into fuel poverty, many have no choice but to have prepayment meters installed, but those who do may actually be paying more for gas and electricity as a result.

Prepayment energy meters are usually installed in homes that have slipped into debt with their energy supplier in order to help them manage their debt and budget more effectively, but new research suggests that those who do so may be getting a worse deal.

Worsening problem

uSwitch estimates that around 5.9 million people in the UK have a prepayment energy meter, which is perhaps unsurprising considering around five million households are currently in debt to their energy supplier – a figure that has risen by 6% in the last year alone.

With the average household energy bill now at around £1,400 and set to rise further still, the number of people having prepayment meters installed will also increase, but these individuals may actually lose out, according to the Guardian, which claims that millions of UK households are paying up to £300 a year more than those on the cheapest tariffs.

The main problem is that, unlike customers on standard meters who can choose from a range of tariffs and plans, energy providers sometimes offer just one tariff to prepayment customers, which is often far more expensive than the supplier’s best tariffs.

“It’s not just bigger bills prepayment customers face; there are plenty of other downsides. For starters, if you run out of energy unexpectedly, your supply will be switched off until you press the emergency credit button, which gives you time to pop out and top up the card or key,” the newspaper states.

Help is at hand

However, there are options open to those on prepayment tariffs, particularly if they manage to pay off their energy debt and then switch to a post-pay plan.

The energy supplier may insist that customers meet certain conditions before they can switch, such as demonstrating that people have a current account and have been debt-free for at least three months.

Even for those still in energy debt, there are options, however, with prepayment customers able to switch to a prepay tariff offered by a rival provider.

Last year, energy regulator Ofgem increased the amount of debt that can be transferred from £200 to £500, and uSwitch research suggests it may be possible to save up to £138 by switching prepayment tariffs to a more competitive plan.

Consumers with prepayment plans may be more restricted than those on post-pay meters, but they still have options open to them when it comes to securing a cheaper deal and climbing out of energy debt.

Join the conversation

  • terry

    The way to deal with this cartel of thieves is to curtail them down to just one company, say everyone switched, by an online majority vote to use one company and cut the the other 5 major suppliers to zero business, then just one company supplies gas and electricity (whoever is chosen) then the one company would have such a phenominal amount of revenue it would be embarrassing to raise prices for any reason/excuse, but say they didget greedy, then the nations total energy users en-masse could bring to bear on this wretched government a massive out cry , national strike or whatever it would take and at whatever the cost to the government to force them to re-nationalise the energy industry and bring back some common sense.

  • terry

    The so called (wages) of the energy bosses hierarchy can only be compared to annual lottery wins. where is any man regardless how astute and business wise he is , be worth a telephone figure salary , in some cases upping towards as much as 3 million quid , when ordinary employees of these very same companies struggle to live on the paltry wages they REALLY EARN. This is now a country where millions of families and pensioners are in fuel poverty, due to the over excessive greed of privatised companies raping peoples health and wealth.May God adversely judge you and this government for the many elderly who have died through hyperthermia in past years due to your GREEDY practices. If i was the prime minister of this country, where food bank usage has tripled and these rampantly greedy energy suppliers continue un- abated in their animalitic without being put in check, i would……… HANG MY HEAD IN SHAME. Get the message mr. cameron, after ALL,YOU SAID, WER`E IN IT TOGETHER

  • Nut Magnet

    Even worse than the higher costs. I moved into a property 4 years ago and the gas and electric meters were over £50 in debt. The standing charges had racked up and I called Npower before I put any credit on the meters. NPower said they couldn’t help immediately and I would need to make an appointment which could be up to 72 hours to have the meters reset. I could however charge the key and card and clear the debt and they would reimburse the charges if I was not at fault. Having cleared the debt and calling NPower back to chase the money I was told I should have made the appointment to have the meters reset and they could do no more.

    Be careful if you take on meters with debt. If you clear the debt it’s down to you to recover the monies from the previous occupier and of course the energy supplier will not help there because of confidentiality issues…

  • shelly purdy

    All I do is ply these sodding meters with all my money…. we use hardly anything…. freezer, tv n 1 light…. You tell me !!!! Im sick of UTILITY WAREHOUSE !!!!! they mucked up direct debit n I payed 3 times and in end let them fit dam meters…. 1800 in debt ! WHAT A JOKE !!!!! payed n there court charges on top of…. When id paid bill n refused to pay another bill until they sorted out…. cost me in bank charges too…. n still on going 2 yrs later !

  • shelly purdy

    LET ALONE THE GAS… ALSO PRE PAY METER N HAVE RECIEPTS !

  • shelly purdy

    ON TOP OF THIS IS TALK TALK !!!!! 118 118 CHARGED ME NEARLY £100.00 IN 3 CALLS I NEVER MADE TO FIND OUT ? WAS TO THERE HELP CENTRE !!!!!! WTF !!!!! ment to be free phone number n there error YET AGAIN ! FFS !

  • shelly purdy

    RIP OFF BRITON !!!!! YEP SPELT WRONG ! just coz im pissed off with BEING RIPPED OFF !

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