How Do Prepayment Meters Work?

By Energy Company Numbers on October 28, 2016 in Help and advice

When it comes to paying for your gas, and electricity, homeowners and renters will find that there are often several different opportunities available to them. One of the solutions that you might consider, is a prepayment meter. At present, nearly 6 million people across the United Kingdom have a prepayment meter. As the name suggests, these meters require you to pay for your electricity and gas needs before you use it – like a pay-as-you-go mobile.

Perhaps the best thing about prepayment meters is that they allow you to cautiously monitor your spending and energy usage over time. So long as there is credit on your meter, you will be able to access electricity and gas whenever you need it. However, when your credit begins to run out, you’ll need to visit a prepayment location to top up before your energy supply will be switched on again.

How Prepayment Meters Work

When you have a prepayment meter installed in your home, you will be expected to pay for your electricity and gas upfront – maintaining a constant line of credit which you use to fulfil your energy requirements. There are two main forms of prepayment meters that individuals within the UK can choose between, including:

  1. Key meters – which have keys specific to your meter including specific tariff information.
  2. Smart card meters – which download information about your energy usage to send to your supplier each time you top up.

Most prepayment meters can be topped up by taking your key or card to a local Payzone or Post office. The device in question can be inserted into meter for electricity or gas to be available, so it’s important to make sure you keep your key or card safe. In some cases, it will be possible to top up your smart card throughout the internet.

Related: Can I change to a standard meter from a prepayment meter?

One important point to remember is that most prepayment gas meters will only use a single rate for energy. This means that you’ll be expected to pay the same price for your energy, regardless of when you use it (peak or off-peak hours). On the other hand, prepayment electricity meters can either be accessed in a single-rate form like the gas option, or a two-to-three rate meter where you will pay a different price per when you use your electricity.

Why Do Some People Install Prepayment Meters?

Since prepayment meters are often considered to be more expensive than other forms of electricity and gas solutions, you would be forgiven for wondering why people install them in the first place. In most circumstances, prepayment meters are placed into homes where the occupiers have already slipped into some amount of debt with their energy supplier. The reason for this is that a prepayment meter generally makes it easier to avoid unexpected bills and budget carefully throughout the year.

In certain situations, people who install a prepayment meter because of the outstanding debts that they hold with an energy provider may be asked to pay off their debt alongside their electricity and gas costs – which means that the prices paid may be higher than the cost of the energy that they are using.

Related: Prepayment, pay as you go and top up energy supplier guide

If you move into a property that already has a prepayment meter installed, it’s important to inform your supplier immediately that you are the new owner of the property. Not only will this ensure that you are not responsible for paying off the debt of the previous occupant, but it can also help you to determine whether you should start shopping around and comparing tariffs for your energy consumption needs.

Can You Get Rid of Prepayment Meters?

If you feel as though a prepayment meter isn’t the right option for you, then the chances are that you’re going to want to start looking for a cheaper energy plan. While it is possible for people who are not in debt with their energy supplier to generally move to another provider, or look for an alternative solution when it comes to paying for their energy – this might not be possible if you have built up some debt. Many energy suppliers will require you to stay on their prepayment meter plan until you have paid off the money that you owe.

If you have simply moved into a home that has a prepayment meter installed, switching to an alternative source of energy should be much simpler, though some providers may charge you for having a new meter installed. What’s more, you may find that some suppliers will require you to meet certain conditions such as having a current account, or ensuring you are debt free for several months.

Related: How to top up your E.ON prepayment meter

Regardless of whether you are locked into a prepayment meter or not, remember that it’s worth comparing your options to see whether you could switch and save.

About the Author

Energy Company NumbersView all posts by Energy Company Numbers
Energy Company Numbers is a telephone number directory service dedicated to helping UK consumers keep in touch with their energy suppliers.


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