To bill their customers, utility companies will estimate how much energy their customers use each year, based on previous usage patterns and seasonal changes. The actual amount of energy used is measured when a meter reading is taken a couple of times a year.
However, if you are one of 5.9 million customers in the UK who have a prepayment meter, you will pay for your gas and electricity upfront. There are advantages and disadvantages to having a prepayment meter, so there are several things to consider before making any decisions about switching.
What is a prepayment meter?
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. They work in a variety of different ways including smartcards, tokens, keys, and in some cases, money must be put straight into the meter.
What are the pros and cons of prepayment meters?
When it comes to prepayment meters, the disadvantages for the customer generally outweigh the advantages.
Advantages of prepayment meters include:
- Helping customers to manage their debt and energy usage
- Prevents large, unexpected bills
Disadvantages of prepayment meters include:
- Above average costs for using gas and electricity
- Best energy deals on the market aren't available to prepayment customers
- Inconvenience - will often require trips to a shop 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, which can take months. You could be left paying old rates and owing a lump sum.
How can you save money with your prepayment meter?
You may want to consider switching to a standard credit meter, which can be installed by your supplier if you have a current account and have been debt free for at least 3 months. Once installed, you can compare energy suppliers with uSwitch and take advantage of the most competitive plans available.
But if switching to a prepayment meter is not an option, you could still save up to £138 by switching your prepayment plan to another energy supplier.
See how much you could save by switching - compare energy suppliers today.
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