We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.

Coronavirus Read our latest advice

Prepayment energy customers set to save £80 a year

Energy firms to cut gas and electricity prices

Prepayment energy customers set to save £80 a year

Over four million households who pay for their gas or electricity via prepayment meter should save around £80 on their energy bills per year, after a price cap comes into force on 1 April. Plus we reveal the cheapest prepayment deals.

The price cap is expected to cut prepayment gas customers’ bills by around 10-15% over a year, or reduce electricity bills for those who heat their homes on Economy 7 electricity tariffs by £80 per year (based on a household’s typical consumption), according to energy regulator Ofgem.

The proportion of customers with prepayment meters has doubled in 10 years. Ofgem said it expects that many energy suppliers will have to significantly reduce the prices of their gas and Economy 7 electricity tariffs to meet the cap.

The price cap varies for electricity and gas, and depends on the type of meter you have and where you live.

The price cap was proposed because prepayment customers have fewer tariffs to choose from than those who pay by direct debit, cash or cheque, and the tariffs are usually more expensive. Our research below shows prepayment customers could be paying hundreds more than they need to.

An investigation into the energy market by the Competition and Markets Authority (CMA) last year also found that prepayment customers are also most likely to be in vulnerable circumstances.

Scroll down to find out how the price cap affects what you pay for energy, depending on where you live. Or use our independent energy switching site Which? Switch to check if you’re on the best prepayment energy deal.

How does the prepayment energy cap affect me?

If you prepay for your energy and have a traditional prepayment meter (not a smart meter), this price cap should apply to you. It includes customers who prepay on Economy 7 two-rate meters or other types of restricted meters.

The impact the cap will have on your bills depends on your tariff and how much energy you use and is set by Ofgem. For example, if you live in Yorkshire and North Lincolnshire, the maximum price cap is set at £517.80 per year (based on an average use of 13,500kWh of gas). But in South East England, the cap is £538.63. The price difference is due to differing network costs around the country. Find the price cap for your meter and region on Ofgem’s website.

The cap is the maximum price energy suppliers can charge. Ofgem says the cap still allows suppliers to compete on price.

The price cap is temporary. It’s expected to last until 2020 – this is when the roll-out of smart meters is planned to be completed, which should allow prepayment customers to access better energy deals. Regulator Ofgem said the price cap is part of its work to create a more competitive, fairer energy market for all consumers.

Save money on energy

Around 16% of energy customers in Britain pay in advance for their energy using a prepayment meter, the Competition and Markets Authority (CMA) estimated in 2015. But around 58% pay by direct debit (with a credit meter) – and they often pay less.

The cheapest prepayment tariff available across the country currently costs £1,025 for dual fuel for an average household per year. But the cheapest direct debit tariff for the same customer (with a credit meter) costs £834. So if you’re on a prepayment meter tariff, even if you’re on the cheapest dual fuel prepayment deal already, you would save at least £191 by moving to direct debit payments.

If getting a new meter sounds like too much hassle, changing your prepayment tariff can still save up to £202 per year. We list the top five cheapest prepayment meter deals available across the country in the table below.

Top five cheapest prepay energy deals for February 2017
Supplier Tariff Annual price Tariff type Exit fee Saving from priciest prepay tariff (Economy Energy)
E 1 Year Fixed Price 2017 £1,025 Fixed n/a £202
Toto Energy Go with the flow – Smart pay as you go – Paperless £1,030 Variable  n/a £198
Economy Energy Smartpay – Paper and Paperless £1,030  Fixed  n/a £197
Utilita Smart Energy £1,032  Variable  n/a £195
EDF Energy Blue+Fixed Prepay March 2018 – Paperless £1,036 Fixed  n/a £192
How these prices are calculated: Prices are based on a dual-fuel tariff for an average user (using 3,100kWh of electricity and 12,500kWh of gas per year), paying by prepayment meter and are averaged across all regions. Exact prices can vary according to region and usage. The prices given in the table above are correct as of 6 February 2017. Tariffs named ‘smart’ require you to have a smart meter installed.


Make sure you check what other customers think of their energy supplier before you switch. Our latest energy company satisfaction survey rates 23 GB energy suppliers based on the opinions of their customers. We’ve got ratings for the big six suppliers, as well as prepayment specialists including Utilita.

How to switch energy firm with a prepayment meter

Compare and switch suppliers

Choose the fuel type
to compare:

Gas and electricity Electricity
Gas only

Having a prepayment meter for your gas or electricity shouldn’t stop you getting a better deal on your energy. All the big six energy firms – British Gas, EDF Energy, Eon, Npower, Scottish Power and SSE – will let many customers switch to a credit meter free of charge.

To move off prepay, you will usually need to have paid off any debts to your supplier. Apart from EDF Energy, the big suppliers will also run a credit check so they can see if there’s a risk you won’t pay.

If you’re able to get a credit (billed) meter installed by your energy supplier, you’ll often automatically be put onto its standard variable tariff. This is often pricier than other fixed term tariffs. So use a price comparison website, like Which? Switch, to find the cheapest deal and switch to it.

If you cannot switch owing to your credit history, you’ll need to pay off any energy debts and boost your credit score – read our expert tips on how to improve your credit rating.

Prepayment meters are electricity and gas meters that let you pay-as-you-go for your energy. You can top up with a key or card, which you load money onto at newsagents, post offices and sometimes online.

(All pricing is supplied by Energylinx, and based on a dual fuel medium user [3,100kWh electricity and 12,500kWh gas per year], choosing paperless billing. Prices are averaged across UK regions and correct on 6 February 2017.)

More on this…

Back to top
Back to top