How to change from a prepayment meter to a standard credit meter
A prepayment meter requires customers to pay for energy before they use it. A credit meter requires customers to pay after they've used energy. Customers should try and ensure they have the meter type that best meets their needs, but sometimes it's necessary to change from a prepayment meter to a credit meter.
How does a prepayment meter work?
A prepayment meter is a type of gas or electricity meter that requires you to pre-pay for your energy before you use it. You’ll know if you have a prepayment meter if you have to top up a smart card, key or app to pay for your gas or electricity.
There are around four million prepayment energy meters in the UK. Prepayment meters are usually installed in homes that have fallen into debt with their supplier, and are also common in rental properties.
How does a credit meter work?
A credit meter is a more common type of meter that allows households to pay a set amount a month for their energy usage. These are also known as direct debit meters, as that’s the most common way to pay for these energy tariffs. With a credit meter, there’s no risk of running out of credit and no need to top up.
Which is cheaper: a prepayment or credit meter?
Prepayment meter tariffs were traditionally more expensive than standard credit meters. Because this disproportionately affected those on lower incomes, it led to accusations of a "prepayment premium". As part of the February 2024 price cap announcement, the government is applying a discount on prepayment standing charges, which means that prepayment will be slightly cheaper than standard credit. This could be the case for months if not years.
However, those on standard credit meters will likely have more choice in terms of deals to switch to than those on prepayment meters.
Can I change my prepayment meter to a standard meter?
You should be able to change your prepayment meter to a standard meter as long as you're not more than £500 in debt to your current supplier.
Even if you're in debt to your supplier, there are times when it isn't safe or practical for you to be on a prepayment. For instance, if you need a constant supply of electricity to power lifesaving equipment, or you can't safely access your prepayment meter to read or top it up, you should make your supplier aware.
Case study: "Uswitch sorted my energy and helped me with my slightly complicated situation of moving house from a credit to a pre-payment meter (which I didn't understand at all!) and gave me very helpful advice for the best way to make sure I could get the cheapest deals and switch over to a credit meter. I would thoroughly recommend."
- Sophie, Uswitch customer
How much does it cost to switch from a prepayment meter to a credit meter?
None of the bigger suppliers charge to change prepayment meters over to credit meters. However, they will require that your energy account is debt-free, and some may run a credit check to ensure you're suitable for a direct debit plan. Contact your supplier to get the ball rolling.
Can I change to a credit meter if I rent my home?
You should be able to change from prepayment to credit if you directly pay your supplier for your energy. However, as it requires a physical change to the property, it's best to check with your landlord first.
How long does it take to change a prepayment meter to a credit meter?
It depends how busy the supplier's engineers are but it should offer you its earliest timeslot. The process could take a few hours.
It's worth noting you'll be eligible for compensation if the supplier:
- misses the appointment
- changes the appointment without your agreement and with less than one working day’s notice
- sends an unqualified engineer without the right tools to do the work.
You'll be eligible for £40 compensation within 10 working days. If you haven't been paid within 10 working days, you'll be eligible for another £40.
Some customers were wrongly forcibly moved onto a prepayment meter during the energy crisis.
If you were moved onto a prepayment meter between 1 January 2022 and 31 January 2023, you might be owed compensation if your supplier:
- installed a prepayment meter in your home
- remotely switched you over to prepayment.
Your supplier should send you a letter letting you know if you’ll receive compensation, but you can also contact it to find out.
What can I do if I can't change my prepayment meter?
If you don't meet the criteria for a credit meter, there are still measures you can take. You may still be able to find a cheaper deal than your current one with a different supplier, but you may have to go directly via individual suppliers.
Some prepayment plans offer other features besides price — for example, some suppliers provide more convenient ways for topping up, such as via your smartphone.
Prepayment meters are being phased out by the smart meter initiative, which aims to offer a smart meter to every home by June 2025. This will make it easier to top up and understand how you consume energy throughout the day.
Learn more about smart meters here.
What do I do if my new home has a prepayment meter?
Firstly, find out who your supplier is. If your new home is already with a large supplier, then you can ask it to change the meter for free. You will still be subject to a credit check before your supplier agrees to prepayment meter removal.
Why do energy companies run a credit check?
An energy plan on a standard meter is like having a lending agreement. The energy company will agree to supply energy to your household provided that you can keep up with monthly or quarterly repayments via direct debit. Prepayment meters are a safety net for suppliers, as customers have to top up their meter to continue receiving energy to their homes.
How can I improve my credit score?
If you're concerned that your credit score might prevent you from being allowed to change your prepayment meter to a standard one, then you should take some steps to improve it.
Here are some quick tips to help you get your credit score up.
1. Register on the electoral roll
This is easy to do online and shouldn't take longer than five minutes. You only need to register once to be eligible to vote in every election, but you do need to register again every time you change your address, name or nationality.
So what does this have to do with your credit score? Energy companies, banks, and other lenders will almost always reject customers not registered to vote. Having your name confirmed on the electoral register means you are tied to your current address. Those who are not officially registered to their address are considered to be more of a fraud risk.
2. Close credit accounts you no longer use
If you have a few credit cards you haven't used in a long time, be sure to close those accounts. Your credit report reveals to energy companies how much money you are borrowing. Even if you are not using your credit limit it still shows that you have the capability of running into debt.
3. Wait before applying again if you've been rejected
Credit reports show energy companies and lenders all of the recent applications you've made for credit cards, mortgages, bank accounts and even mobile phone contracts. If you've been rejected recently, then you should wait a few months before applying again. Being rejected multiple times in close succession lowers your credit score as it is considered to be a sign of being in a desperate situation.
4. Take out a low-limit credit card
It may seem counterintuitive to apply for credit when you want to improve your credit score, but there are credit cards designed for people who want to build their score up. These credit-building credit cards have low spending limits and high rates of interest to encourage customers to use them sparingly and pay them back in full and on time every month. Doing this regularly proves to energy companies that you can be trusted to pay bills on time. You can compare credit-building credit cards with Uswitch.
Once I've switched from a prepayment meter to a credit meter, can I switch energy?
Yes, there shouldn't be anything stopping you from switching your energy once you've got a credit meter. Get started by clicking below.
Run an energy comparison
Click here to compare energy prices and get started on your energy switch.
