This article explains everything you need to know about prepayment meters, also known as Pay-As-You-Go (PAYG) meters. You’ll learn what they are, how to top-up, why they may be installed, what to do if your credit runs out and how to prevent that from happening in the first place.
If you’re at risk of being cut off supply because you’re unable to top up, tell your energy supplier and speak to our team about your options.
Ofgem estimates that about 4.3 million people in the UK have a prepayment meter. Oftentimes, the available tariffs are more expensive than those offered to credit customers and prepayment customers have a very real risk of being cut off supply. So what is a prepayment meter, how do they work and why do people have them?
A prepayment meter, also known as a Pay As You Go (PAYG) meter, requires customers to pay for their energy in advance. Customers are issued with a key for their electricity meter and/or a card for their gas meter, which they can take to a local outlet (e.g., PayPoints, Payzones and/or Post Offices) to top-up with credit.
PAYG customers won’t receive bills but will get an annual statement that lists their current tariff, energy used and payments made.
A traditional PAYG meter will have a slot to insert the key/card, which will transfer the credit to the meter and will allow the household to continue using energy. To ensure a successful transfer, the key/card should be inserted for at least 5 seconds. Smart PAYG meters may not have a slot for the key/card but credit added to these at the shop will be transferred remotely to the appropriate meter. Smart PAYG meters may also allow customers to top up online, over the phone, by text or through an app.
The credit you add to the meter pays for the energy you use in addition to the daily standing charge and any debt repayments. The meter will display the credit available, any money owed (e.g., unpaid emergency credit and debt) and agreed weekly repayments, if any. The meter can also warn you if you’re running out of credit.
Customers who have difficulty with personal finances may prefer prepayment meters over credit meters to help them budget more effectively. Paying for energy upfront ensures that households won’t receive large, unexpected bills.
Prepayment meters may also be installed where customers owe their energy supplier money, and may even be forcibly exchanged if the supplier gets a warrant. (This is a last resort for suppliers after exhausting all other options.) Suppliers can’t do this, however, if it would be unsafe or impractical for a customer to use the PAYG meter.
If you find yourself at risk of being cut off electricity or gas supply, know what to do and what help is available.
Many energy suppliers offer friendly credit at times when a customer may run out of credit but would not be able to top-up at a shop – typically overnight, on weekends and/or bank holidays. It gives the customer a bit more time to buy more electricity or gas. Friendly credit is applied automatically so customers don’t lose supply and is repaid when the customer next tops up. Check the terms with your supplier, as some only offer friendly credit for electricity meters and others only offer it for newer meters.
Outside of the friendly credit hours, customers who run out of credit can access emergency credit, typically £5. Customers can activate this loan when their credit dips below a specified threshold (e.g., £3, £2, £1) and their key/card is inserted into the meter to transfer the credit. (Sometimes customers may also need to press a red button.) Emergency credit is repaid when the customer next tops up.
If you lose your key/card, can’t physically get to the shop to top-up or can’t afford to top-up, speak to your supplier immediately, either by phone or online chat. Suppliers may post pre-loaded cards in the mail or provide customers with a code to add credit to a new key they can pick up at a designated outlet. The new key/card may not be branded with your supplier’s name but the supplier will let you know which brands will work. Any pre-loaded credit will need to be repaid. If you’re unable to go the shops and do not have a trusted person to take the key/card there for you, energy suppliers may be able to send engineers to do this instead. Local authorities may also be able to support those who are shielding.
For customers who have exhausted the above options, fuel vouchers could be the lifeline they need. These are small grants to pay for electricity and/or gas to get people back on their feet. Customers are expected to seek money advice prior to receiving a fuel voucher to ensure they’re receiving appropriate benefits and discounts as well as reducing their energy consumption through energy efficiency measures and energy conservation. Ask our advisors about requesting a fuel voucher.
If a voucher is issued to a customer that usually tops up at a PayPoint shop, the customer (or trusted person) can redeem the voucher at a PayPoint facility by presenting their key/card, the voucher (either a print-out or on an electronic device, such as a smart phone) and ID* to confirm their name and address. They will then receive credit on their key/card. British Gas customers will need to be issued with a Payzone voucher in order to top up at the customer’s usual Payzone store or Post Office.
If an energy supplier has not provided the customer with a card to top up their smart meter and the customer instead typically tops up online or through an app, please inform the welfare provider.
*If a customer does not have appropriate identification, let an advisor know in order to discuss other possible options.
Understanding how much you’re paying towards energy use, standing charges and debt repayments, if any, is an important first step to getting your energy payments under control. You should be able to find these figures on your meter display. If you have any debt, make sure to negotiate an affordable repayment rate with your supplier. Repayments are taken from first top up after specified day (e.g., Wednesday) each week.
Even if you don’t use any energy and have no debt on your meter, top-up your meter on a regular basis to ensure that your daily standing charges don’t build up. This is a common occurrence with gas prepayment meters over the summer months when customers may not be heating their homes. It can be a big blow when a customer goes to top-up that first time ahead of winter. If you no longer use gas in your property, speak to your supplier about disconnecting the meter.
Whilst prepayment meters can help people budget, oftentimes there are fewer tariffs to choose from and customers may end up paying more for their energy. It pays to shop around, whether or not you choose to keep your prepayment tariff or change the way you pay.
If you find a supplier offering a cheaper prepayment deal – potentially by moving annual statements online, switching supplier with a traditional prepayment meter should be a breeze. Customers with smart prepayment meters may need to jump through a few more hoops to make the switch but our advisors can walk them through the process. Most suppliers will allow customers to switch with up to £500 of debt.
Switching can take up to 3 weeks to complete but your new supplier will tell you the exact date the switch will take place. Continue using the previous supplier’s key/card until that time. Use any credit you have left on the key/card from your previous supplier before activating the new key/card. This credit could be lost otherwise. Activate the new key/card by inserting it into the meter for 1 minute on (or after) the ‘Change of Supply’ date. You can then take the key/card to the shop to top-up.
If you decide to change the way you pay, for example by direct debit, to take advantage of cheaper deals, you can ask your supplier to convert your prepayment meter into a credit meter. Suppliers can potentially do this remotely if you have a smart meter. Converting a traditional meter, on the other hand, involves physically removing the prepayment meter and fitting a credit meter. There shouldn’t be a cost to this if they replace it with a smart meter but it’s best to double check.
Unlike switching between prepayment tariffs, customers wanting to change the way they pay may need to pass a credit check and they may be refused if they have debt on the meter. Other suppliers want customers to establish a payment history with them first, up to six months, to establish they’ll be able to keep up with payments as a credit customer.
In a limited number of cases, customers wishing to switch from a prepay-only supplier to a credit-only supplier may need to complete the switch online instead of speaking directly to a customer service representative. Our advisors can help facilitate the switch if you have any difficulties.
Tenants should speak to their landlords about exchanging meters before new meters are fitted.