Prepayment tariffs aren't as competitive as standard meter energy plans. While you can always save by comparing plans and switching from one prepayment plan to another, it’s likely you could save more by switching your prepayment meter out and replacing it with a standard credit meter — giving you access to cheaper deals on the energy market.
Don't rely on the price cap to save
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Can I change my prepayment meter to a standard one?
Not everyone is eligible to change their meter out for a different type. Additionally, those that are eligible may need to pay for it. The big six suppliers will switch their customers’ meters out for free.
How much does it cost to switch from a prepayment meter to a credit meter?
As of April 2016, none of the big six 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. Contact your supplier to get the ball rolling.
Some of the smaller suppliers are likely to charge a small fee for the removal and installation of the new meter. However, in the long term, you’re likely to save money on your energy plan with a standard meter.
What can I do if I can't change my prepayment meter?
If your current energy supplier charges for the meter change, consider switching to a supplier that won't. All of the big six don't charge to switch out your prepayment meter.
However, you should first check that you would be eligible for a standard meter. Your credit rating will be an important consideration.
If you simply cannot meet the criteria for a credit meter, there are still measures you can take. You can still find a cheaper deal than your current one with a different supplier by comparing prepayment energy plans with uSwitch.
Some prepayment plans offer other features besides price — some suppliers like Ovo Energy provide more convenient ways for topping up via your smartphone, saving you a run out to the corner shop at least.
Prepayment meters are being phased out by the smart meter initiative, which aims to have a smart meter in every home by 2020. This will make it easier to top up and understand how you consume energy throughout the day.
To learn more about smart meters, read our guide.
My new home has a prepayment meter. What do I do?
Firstly, find out who your supplier is.
If your new home is already with a big six supplier, then you can ask them to change the meter for free. You will still be subject to a credit check though.
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:
Register on the electoral roll
Close credit accounts you no longer use
Wait before applying again if you've been rejected
Take out a low limit credit card
This is really 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.
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.
Credit reports shows 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. Having rejections in close succession lowers your credit score as it is considered to be a sign of being in a desperate situation.
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 it sparingly and pay it 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.
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.
Prepayment meters are a safety net for suppliers, as customers have to top up their meter to continue receiving energy to their homes.