Prepayment meters

Around 5.9 million people in the UK have a prepayment meter - but they aren't the right choice for everyone. Find out the advantages and disadvantages of prepayment meters with our guide before you make a decision about switching.

With a prepayment meter you have to pay for your gas and electricity upfront.

They work a bit like a pay as you go mobile phone - you have to top-up with credit to get your gas and electricity.

The top-ups work in a variety of different ways - you could have a smartcard, token or key that you have to take to a shop to pay money onto. In some cases, you put money straight into the meter itself.

You can top-up at recognized PayPoint or Payzone shops or at The Post Office.

Prepayment meters are usually installed into homes that have slipped into debt with their energy supplier at some point, to help them manage their debt and their budget more effectively.

Some landlords also like to have them installed in their rental properties, to try and cut the risk of their tenants running into debt.

When it comes to prepayment meters, the disadvantages generally outweigh the advantages.

Advantages of prepayment meters include:

• helping customers to manage their debt and energy usage;
• preventing large, unexpected bills,

Disadvantages of prepayment meters include:

• above average costs for your gas and electricity;
• the best energy deals on the market aren't available to prepayment meter customers;
• they can be inconvenient because you have to go out to 'top up' keys and smartcards;
• if you can't reach a shop to top up your meter your energy can be switched off;
• older meters need to have their prices updated manually after price rises or falls, which can take months. which This means you could be left paying old rates and owing a lump sum or paying too much.

If you have to switch to a prepayment meter because you're in debt to your energy supplier, you will pay off your debt bit by bit at the same time as you pay for the gas and electricity you use.

This means that as well as paying the unit rate for the energy you use, you'll pay a little extra to go towards what you owe.

In some cases you can switch from a prepayment meter to a standard meter. However, you may find that your supplier will charge you to remove your prepayment meter and install the new meter.

Your energy supplier may also insist that you meet certain conditions before you can switch - for example that you have a current account and have been debt free for at least 3 months.

Call your energy supplier to find out more about getting rid of your prepayment meter.

Once installed, you can compare energy suppliers with uSwitch and take advantage of the most competitive plans available.  

It is possible to switch prepayment tariffs and you could save up to £138 by switching to a more competitive plan.  See how much you could save by switching your prepayment tariff - compare energy suppliers today.

If you've moved to a new home which has a prepayment meter, it's vital that you register with the energy company as the new account holder. If you don't, you could end up paying the wrong rates as the previous occupier could be in debt to the energy supplier.

Once you've registered as the new owner it's a good idea to compare prices to make sure that you're on the cheapest possible prepayment meter tariff.

To get a meter reading from your prepayment meter, you will usually have to press a button on the meter (sometimes it's blue). This will change the display from showing the remaining credit to showing the actual reading. From there on, it's just like taking a normal meter reading.

We'd like to hear from you - please let us know if you found this guide useful: editor@uswitch.com