Prepayment tariffs aren't as competitive as standard meter energy plans. While you could 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.
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What is a prepayment meter?
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 prepayment card, key or app to pay for your gas or electricity.
There are around 4 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. Prepayment meter tariffs tend to be more expensive than those on standard credit meters.
What is a credit meter?
A gas or electricity 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.
Prepayment meter vs direct debit
Tariffs on credit meters tend to be more affordable, so you might want to consider changing from a prepayment meter to direct debit. However, you will need to consider your circumstances to see if switching meters is the right option for you.
You can see the cheapest tariffs available through Uswitch for a prepayment meter vs direct debit meter in the tables below:
Current cheapest prepayment deals from Uswitch
|Standard Pay As You Go||£1065||Compare now|
|E.ON Energy Plan with Prepayment||£1069||Compare now|
|Standard (Variable) Prepayment||£1069||Compare now|
|Safeguard PAYG||£1069||Compare now|
|Prepay Total Service Nov21||£1115||Compare now|
Based on average bill sizes for a medium energy user on a dual fuel prepayment plan, and averaged across all regions. This information is updated hourly with energy plans which are available to switch to through Uswitch. To appear in this table, plans must be available in at least 7 of the 14 regions.
Current cheapest credit meter deals from Uswitch
|Supplier||Plan name||Tariff type||Price|
|Energy January 2022||Fixed until 31 Jan 2022||£873||Compare now|
|GNE Summer Sizzler V9||Fixed for 12 months||£876||Compare now|
|Simple and USelect12M||Fixed for 12 months||£883||Compare now|
|Better Smart||Fixed for 12 months||£883||Compare now|
|Fix Online Exclusive v49||Fixed for 12 months||£890||Compare now|
|Energy Plus Home Cover Sep 2021v3||Fixed until 30 Sep 2021||£891||Compare now|
|Simply Online 1 Year Fix Sep21v7||Fixed until 30 Sep 2021||£895||Compare now|
|Exclusive 12 Month Fix v15||Fixed for 12 months||£897||Compare now|
|So Birch Essential - Green||Fixed for 12 months||£904||Compare now|
|Online Energy v5||Fixed for 12 months||£909||Compare now|
Based on average bill sizes for a medium energy user on a dual fuel plan paying by monthly direct debit, and averaged across all regions. This information is updated hourly with energy plans which are available to switch to through Uswitch. To appear in this table, plans must be available in at least seven of the 14 regions.
Can I change my prepayment meter to a standard meter?
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 usually not charge their customers for changing from a prepayment meter to direct debit.
How much does it cost to switch from a prepayment meter to a credit meter?
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 to ensure you're suitable for a direct debit plan. Contact your supplier to get the ball rolling.
Some of the smaller suppliers are likely to charge a small fee for prepayment meter removal and installing a new credit meter. However, in the long term, you’re likely to save money on your energy plan with a standard meter by paying via direct debit.
What can I do if I can't change my prepayment meter?
If your current energy supplier charges for prepayment meter removal, consider switching to a supplier that won't. The big six suppliers will usually switch out your prepayment meter for free.
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 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 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.
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 before your supplier will agree to prepayment meter removal.
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 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.