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Home & garden.

Updated: 12 Nov 2021

Is a prepayment energy meter right for you?

Do you have a prepaid electricity or gas meter? Find out if you can change from prepayment meter to direct debit, how to switch energy supplier and what happens if your energy firm closes.
Sarah Ingrams
Prepay meter 462671

Prepayment can be a useful way of keeping on top of your energy use and managing your household budget. But it can also stop you accessing the cheapest deals for your gas and electricity.

While some homes have always had a top-up prepayment meter, other households have had one installed by their energy supplier after going into debt on their energy bills.

What is a prepayment meter?

A prepayment meter means you pay in advance for the gas and electricity you use, by topping-up your meter with credit.

They’re also called pay-as-you-go meters, prepaid meters, and keypad meters in Northern Ireland.

If you have a prepayment meter, you’ll usually have a card, key or token that you can top-up with credit. You can usually do this at a shop where there’s a PayPoint or PayZone, at a post office, online or by phone.

Around four million homes in England, Scotland and Wales have them. In Northern Ireland, prepaid meters are one of the most common ways of paying for your electricity and gas (62% of gas customers and 45% of electricity customers pay this way). 

Do you live in Northern Ireland? See our reviews of Northern Ireland energy companies – Northern Ireland electricity and gas.

Paypoint logo to top-up prepayment energy meters

British Gas prepayment and other prepayment energy firms

Not all energy companies accept customers with prepayment meters, though the choice is widening. All of the biggest energy firms, including British Gas, EDF Energy, Eon, Scottish Power and SSE (now part of Ovo) sell prepayment meter tariffs. Octopus Energy and Bulb sell them too – Bulb launched its most recently in 2020.

There are several firms which supply only (or mainly) prepayment meter customers:

  • Boost is part of Ovo Energy. It supplies only pay-as-you-go customers, with smart or traditional prepayment meters. It scored lower in our customer survey than its parent brand but offers £30 emergency credit if you need it.
  • E scored similarly to Boost in our recent customer survey. It gives £50 loyalty credit to customers who stay with it for a year.
  • Utilita was the highest-scoring of the three dedicated pay-as-you-go firms in our survey. Around 90% of its customers have smart meters and you can  apply for Power Up – top-up credit when you’ve run out.

These aren’t the only firms you can choose from. Other smaller firms offering prepayment tariffs include London Power and Nabuh Energy also sell dedicated pay-as-you-go plans.

Spotted a different firm you’d like to switch to? See the full results of our energy companies survey to see how it compares.

Smartphone app for prepayment energy

Cheapest gas and electric prepayment meters

In August 2021, there was a £26 difference per year between the cheapest dual-fuel deal for a household paying by direct debit and the same household with a prepayment meter:

  • Cheapest direct debit tariff: £1,032
  • Cheapest prepayment tariff: £1,058.

This is based on a household using a medium amount of gas and electricity*.

There was also a £37 per year difference between direct debit and prepayment tariffs from the biggest longstanding energy suppliers.

Some suppliers charge prepayment meter customers between 2-4% more for the same tariff.

Most energy tariffs are made up of:

  • a standing charge (paid daily, whether or not you use any gas or electricity) 
  • a unit rate (the amount you per kilowatt hour of gas or electricity you use). 

How much you pay in standing charge and unit rate varies between tariffs, whether they’re prepayment tariffs or direct debit tariffs. 

You can choose between fixed and variable rate prepayment tariffs. Fixed tariffs mean that your standing charge and unit rate won’t change during your contract. Variable means that they can change whenever your energy firms raises or lowers its prices. So it’s worth checking at least once a year whether you can get a cheaper rate.

Use our independent price comparison website, Which? Switch, to compare gas and electricity prices for prepayment meters.

Follow our step-by-step guide to switching energy supplier to make sure you get an accurate quote.

Smart meter for electricity

Help with winter energy bills 

Energy suppliers must offer emergency credit to customers who are struggling to top-up their prepayment meter, since December 2020.

This might be because you can’t get to your local shop (for example, if you’re self-isolating) or you can’t afford to do so.

Companies also have to offer extra prepayment credit for households in vulnerable circumstances while they work out alternative payment arrangements with you.

Energy regulator Ofgem introduced these new rules to try to reduce the number of customers with prepayment meters who go without energy after running out of credit on their meter.

If you are in debt to your energy company it must work out a ‘realistic and sustainable’ repayment plan. This could include setting payment rates based on how much you can afford to pay and getting in contact with you proactively. Many suppliers do this already.

See more help if you’re struggling to pay your energy bills.

Prepayment meter cap in Britain

Some prepayment meter tariffs have been capped since 1 April 2017. The government introduced this because customers who paid in advance typically paid more than those with standard meters who paid by direct debit. 

The price cap limits the amount that energy firms can charge their customers with prepayment meters on out-of-contract tariffs. It sets a maximum cost per unit of gas or electricity. It is not a cap on your total bill.

The price cap on out-of-contract prepayment meter tariffs has been raised and lowered several times since it was introduced, as you can see below.

Even with the price cap in place, you could still save more by switching supplier or by changing your prepayment meter. Read on to find out how.

Smart prepayment meters

You can have a smart meter whether you pay-as-you-go, by direct debit, or when you get a bill. If you have one, how you pay can be changed without needing to a new meter. 

Not all firms are installing smart prepayment meters yet but will start shortly – check with your supplier. 

Having a prepayment smart meters means you’ll be able to top-up online or using an app on your mobile phone or tablet. You can still top-up in person but you won’t need to put your card or key into the meter. Instead your payments will be added to your account automatically.

If you have a smart prepayment meter, your in-home display will show you:

  • How much credit you have left
  • How much emergency credit you have (and when you’ve used it)
  • Any debt you have
  • If your credit is running low

Find out more about smart meters.

Changing from prepayment meter to direct debit

The cheapest energy deals are usually fixed-term tariffs, where you pay by direct debit each month and see your bills online. Find out more about different types of energy tariffs

To access the cheapest tariffs, you need a meter that can be set-up for direct debit tariffs. If you have a smart prepayment meter, how you pay can be changed without needing a new meter.

If you have a traditional prepayment meter, you’ll need to get it replaced with a standard credit (bill-paying) meter or smart meter.

None of the biggest energy suppliers charge to swap a prepayment meter to a standard credit meter anymore. If you’re with a smaller supplier, check with the company if there’s a fee to change your meter. No firms charge to install smart meters.

Most of the big companies, except EDF Energy and Ovo Energy, will run a credit check. This can show up on your credit file, meaning potential lenders can see it. Check the table below for other criteria you’ll need to meet to get your prepayment meter changed.

The criteria are the same whether you have a traditional or smart prepayment meter. The only difference is that if you have a smart prepayment meter your energy firm should be able to change how you pay without visiting your home to replace the meter.

CompanyCriteria for changing from prepayment meter to direct debit
British GasSoft or hard credit check, taking into account your credit history and whether you have previously had repayment problems. You must also be debt-free to join British Gas. Current customers must have had less than £50 debt for 12 months.
Boost/ Ovo EnergyBoost only supplies customers with prepayment meters so you'll need to move to Ovo Energy to pay by direct debit. Ovo Energy doesn't credit check customers in vulnerable situations.
BulbSoft credit check.
EDF EnergyNo credit check. Customers must be in credit, and not have been in debt in the past three months. You must have had a prepayment meter at least 12 months and not had another prepayment meter for the same fuel within three years.
EonHard credit check and you must pay off any outstanding debt on your meter.
NpowerExisting customers must be debt-free and have good payment history for the past six-to-nine months. New customers may be credit-checked. If your credit is poor, you can pay a £250 security deposit per fuel instead, refundable after 12 months.
Octopus EnergyAssessed on a case-by-case basis. Checks can include time as a customer, energy usage, top-up behaviour, whether you are paying back debt, credit check and general income and expenditure check.

Table notes
1 Information correct in February 2021.

Read our guide to improving your credit score if your energy supplier won’t let you switch following a credit check.

If you’re with a smaller supplier that says it’ll charge a fee to change your meter, you could switch to another supplier that doesn’t and then get it to change your meter instead.

You can switch supplier as long as you have less than £500 of debt for gas and electricity, energy regulator Ofgem says. Its Debt Assignment Protocol lets you switch to another supplier and repay the debt to it instead, based on your agreement with the new supplier.

If you can’t get rid of your prepayment meter, ask your energy supplier to put you on its cheapest deal for your usage. 

Use our independent switching site, Which? Switch, to find another supplier and a cheaper prepayment energy deal.

What happens if your prepayment energy firm closes?

Man reading an energy bill and frowning

If your energy firm stops trading, you should be able to continue to top-up and use your credit as usual while a new supplier is chosen for you.

Any credit you have should always be honoured, whether you have a smart or traditional pay-as-you-go meter. If you have a smart prepayment meter, your new supplier can get the details of it via the wireless network connecting all smart meters (called the DCC).

But some first-generation prepayment smart meters will need 'intervention', energy regulator Ofgem told us. You should still get your credit back but it may not be as straightforward.

If you cannot access your credit, keep proof (such as a photo of your meter, your top-up receipt or a screenshot from an online top-up payment) and contact your supplier. Your old supplier is responsible until a new supplier is chosen. When you have a new supplier, it should tell you how to top-up your meter and how its emergency and friendly credit work.

If you are at risk of going off supply, contact Citizens Advice (0808 223 1133 or use its webchat) or Advice Direct in Scotland (0808 800 9060 or use its webchat).

Read more about what to do when your energy supplier closes

Prepayment energy problems solved

These are some of the most common problems that prepayment meter customers experience, and how to deal with them. 

  1. Price increase - if your energy firm raises the price of its out-of-contract tariff and you’re on it, you can switch energy supplier to avoid it. Follow our step-by-step guide to switching energy supplier. There are no exit fees if you are on this type of tariff.
  2. You can't afford to top up - you can get temporary credit. Some suppliers add this to your meter automatically when you run out, while you might need to ask others. If you need extra support, speak to your energy supplier and read our tips for help paying your energy bill.
  3. Inaccurate meter reading - if you believe your meter is faulty, take regular readings to help prove your case. If you think it's running fast, try turning off all your appliances and watching the meter; it shouldn't still be recording significant amounts of energy. You can also ask your energy firm to test your meter; find out more in our guide to dealing with a faulty energy meter.
  4. Problems with customer service: try online FAQ sections or online chat if you can, as this can be quicker than phoning (as our energy firms call waiting investigation revealed). If you have a complaint, check our tips for complaining to your energy firm.

*A medium user is defined by Ofgem as using 12,000kWh gas and 2,900kWh electricity per year.