If you're one of the estimated 5.9 million households currently paying for your energy using a prepaid meter, here's everything you need to know about 'pay-as-you-go' tariffs, including how to switch to credit meter.
A prepayment meter is a special type of energy meter that can be installed in domestic properties. With a prepayment, or 'pay as you go' tariff, you pay for your energy before you use it - usually by adding money to a 'key' or smart card, which is then inserted into the meter.
Energy is then credited to your account, and your meter will then use this credit until it runs out - the more energy you use, the quicker your credit will run down.
Historically, prepayment meters have had a reputation for literally leaving users 'in the dark', but most modern meters are fitted with an 'emergency credit' function, which offers a set amount of credit to give you extra time to top up, should you run out of pre-paid credit.
Your meter may also have a 'no disconnect' mode to ensure your meter won't cut out at times you can't physically add more credit, such as late at night when the local PayPoint, Payzone and Post Office outlets are closed, even if you've used the 'emergency credit' feature.
Alternatively, your supplier may offer 24-hour tops ups, via text, app, telephone or online.
Paying for gas and electricity in advance helps make sure you don't get into debt with your energy supplier. The major downside with prepaying for your energy usage is the cost - although you can switch suppliers and tariffs, prepayment meters are still one of the most expensive ways to pay for energy. If you're currently using a prepayment meter, run some quotes on our price comparison page to see if you can switch to a better deal.
Ensures you stay in control of how much and how often you pay for your energy.
Helps prevent running up large, unexpected bills.
Helps you avoid getting into debt with your energy supplier.
If you have fallen into debt with your energy supplier, you can use a prepayment meter to pay back the outstanding balance in agreed amounts, over a set period of time. Be aware though, this could mean you need to top-up a bit more than you usually would, so make sure you budget for this.
More expensive to operate than other types of meter, meaning you'll most likely pay more for your energy than with a credit meter.
Topping up at your local PayPoint, Payzone or Post Office can be inconvenient.
If you can't get out to top up your key or smart card, your energy can be switched off, leaving your home without any power. If this happens, you may have to repay any emergency or outstanding credit before it is switched back on.
A credit meter allows you to spread the cost of your energy evenly over the year, so you don't have to pay more when your energy usage increases in the winter. Prepayment meters don't allow for this, meaning you may struggle to find the extra money to top up during the colder months, particularly if you're on a tight budget.
If you don't remember to charge your meter with enough credit before you go on holiday, you could find your energy is switched off, meaning vital appliances, such as fridge freezers, are also switched off.
Prepayment gas and electricity meters are often suitable landlords who rent their property to tenants, primarily because it means tenants can't leave without paying their energy bills in full, in which case the landlord may have to pick up the tab. Prepayment meters also mean landlords don't have to change the account holder registered with the energy company each time there is a change of tenancy.
Prepayment meters are also an option for anyone who has struggled to keep up with bill payments in the past. If a customer has fallen into debt with their energy company, the company may install a prepayment meter to help the customer control their usage against their budget.
Once you've found a deal you'd like to switch to, give the supplier a call and explain that you want a prepayment meter installed at your property. The energy provider will then take you through the process.
To take a prepayment meter reading, you'll need to press a button on the meter (it's usually blue), and this will change the display from showing remaining credit to showing the actual reading, which will be displayed just like on any other meter.
If you lose your prepayment meter key or smart card, get in touch with your supplier as soon as possible to get a new one sent out. So that you're not left without energy until it arrives, your supplier should be able to authorise a temporary card from your nearest PayPoint, PayZone or Pose Office.
If this can't be arranged, you might have to have an emergency callout which will involve a charge.
If you're looking to make the switch from a prepayment meter, the first thing to do is get in touch with your energy supplier to make sure you are eligible for a credit meter.
This will usually involve them running a credit check on you, to help them decide if you'll be able to keep up with the monthly repayments - if you have a poor credit score, you may find your application is rejected and you'll have to stay on a prepayment tariff. If this is the case, compare prepayment tariffs and see if you can find a cheaper deal with another supplier.
If you pass the credit check, an engineer will be booked in to remove your old meter and install a new one, which could take anything between a few days and a few weeks, depending upon your supplier. If your property is fitted with a smart meter, you won't need to have a new meter installed.
Each energy supplier has its own rules regarding the replacement of prepayment meters, meaning you may be charged a fee to cover the installation costs. The good news if your energy is supplied by one of the Big Six, is that you won't be charged any fee for switching from a prepayment to a credit meter.
If your current supplier does charge for the meter change, it may be worth switching to a supplier that doesn't before you make the change. But be aware that you may have to be with your new supplier for a set period of time before they'll switch you to a prepayment meter, so make sure you do your sums first - if you're paying more for your energy with your new supplier, it may work out cheaper to pay the installation fees instead.
If you've moved to a new home which has a prepayment meter, you'll first need to register with the energy company as the new account holder - if not, you might end up paying the wrong rates, especially if the previous occupant was be in debt with the energy supplier.
Once registered, compare prices to make sure you're on the cheapest possible prepayment meter tariff.
If you can't find the meter key or smart card when you move into a property with a prepayment meter, get in touch with your supplier to explain the situation and they will take it from there.
If you want to make the switch from a pay-as-you-go meter to a standard meter, ask your energy supplier to send an engineer to replace the old meter - there may be a fee involved, so make sure you clarify this before you agree to have your prepayment meter replaced.
If there is a fee involved, but you can't afford or don't want to pay it, you may be able to get around it by signing up to a new tariff with your current supplier - if they can see you're happy to stay as a customer (at least for a short while) they may be willing to remove the meter for free.
If your current supplier isn't willing to do this, or you're not happy with the deal on offer, you could compare energy prices to find a cheaper rate with another supplier, and then call them to let them know you would like to switch to one of their tariffs. Tell them you are only willing to do so if they agree to remove your prepayment meter for free. Some energy providers may be happy to do this to get a new customer signed up.
Lastly, you could consider keeping the prepayment meter and simply finding a cheaper prepayment deal. UKPower's energy comparison service compares the whole market - including all available prepayment meter tariffs - and only takes a few minutes to complete. Fill in your post code in the blue box at the top of the page and click 'Compare Prices' to get started.
For more information on switching, check out Can I switch my energy supplier?