If you’ve fallen behind on your energy bill, your supplier may want to move you to a prepayment meter. We asked Sarah Rogers (pictured below), Customer Accounts Manager at Curo, what this means.
What are prepayment meters?
When you have a prepayment meter, you pay for your energy before you use it. This is different to quarterly and monthly bills. With quarterly bills, you pay after you’ve used the energy based on a meter reading or estimate. With monthly bills, you pay a set amount by direct debit every month. The monthly charge is based on what your supplier estimates your annual energy usage to be. The cost of this is then spread evenly across 12 monthly payments.
How do I pay for energy using a prepayment meter?
You top up your meter using either a key or – if you have a newer meter – a smart card. You can buy credit for your key or card at a Post Office or Payzone, or any shop with a PayPoint logo. If you can’t easily get to a shop to buy credit, tell your supplier. They might offer you another way to top up - for example online or by text message. If they can’t do that, they have to install a normal meter that lets you pay monthly or quarterly. So please tell your supplier if, for example, you’re disabled and find it difficult to get out to top up your meter.
Are there any advantages to being on a prepayment meter?
There can be. Some of our customers ask their energy suppliers if they can switch to a prepayment meter because they find it allows them to budget more easily. Prepayment meters mean that you’re paying smaller amounts for energy, more frequently. Some people say this helps them feel in control and stops them getting into debt.
But a big downside is that prepayment customers may be missing out on the best deals. You’re more likely to be on your supplier’s standard rate, and won’t be able to take advantage of discounts for paperless billing or payment by direct debit.
Also, if you often lose or damage your key or card, your supplier may start charging you for replacements.
Another issue is paying different costs at different times of year. When you pay monthly for your energy, your cost is the same, whatever the season and weather. But with prepayment meters, you may pay much less in summer, when you’ve got your heating switched off, than in winter. So we’d recommend putting money aside in summer when you’re paying less, to cover increased costs in winter.
What if my supplier wants to fit a prepayment meter, but I don’t want one?
Ofgem, the energy regulator, have said that customers should not be forced on to a prepayment meter if they are classed as vulnerable. This includes people of state pension age, disabled people, pregnant women, people with mental health conditions or families with children under five years old. If this applies to members of your household, get in touch with your energy provider to let them know.
In April 2023, all British domestic energy suppliers signed up to an updated Code of Practice and tougher Ofgem oversight of prepayment meters that are enforced installations or remotely switched without consent (all involuntary installations).
The Code of Practice (ofgem.gov.uk/publications/involuntary-ppm-supplier-code-practice) sets out procedures that suppliers must follow, strengthening protections for customers in vulnerable situations.
The Code says that suppliers and their contractors must:
- Make at least 10 attempts to contact a customer before a prepayment meter is installed
- Carry out a site welfare visit before a prepayment meter is installed
- Refrain from all involuntary installations for the highest risk customers including:
- Households which require a continuous supply for health reasons, including dependence on powered medical equipment
- People aged over 85 (if there is no other support in the house)
- Households with residents with severe health issues, including terminal illnesses or those with a medical dependency on a warm home (for example due to illness such as emphysema, chronic bronchitis, sickle cell disease)
- Where there is no one in the household that has the ability to top up the meter due to physical or mental incapacity
- Wear audio or body cameras on all warrant installations or site welfare visits to check for vulnerabilities ahead of an involuntary installation or remote mode switch. All audio and footage will be available for audit
- Give a £30 credit per meter (or equivalent non-disconnection period) applied on all warrant installations and remote switches as a short-term credit/measure to remove the risk of customers going off supply
- Re-assess the case once a customer has repaid debts owed. Suppliers must contact the customer to offer assessment of whether a prepayment meter remains the most suitable and preferred payment method of choice for consumers; if any prepayment meter customer is clear of debt and wishes to move off prepayment meter (understanding any changes in the tariff they will pay), the supplier must agree where the customer passes any required credit checks.
What are standing charges?
Standing charges are the cost of running a prepayment meter. This is a fixed amount that you pay every week and varies according to your supplier. If you forget about the standing charge you may think you have more available credit than you actually do. When you next add credit to your meter it will automatically deduct any unpaid standing charges. This will leave less available credit for energy.
Can I still switch suppliers if I’m on a prepayment meter?
Yes, all residents who are responsible for paying their energy bills have the right to switch supplier.
The energy crisis means we’re not seeing the same competitive deals for energy prices, which used to drive customers to switch suppliers. But if your supplier isn’t giving you the customer service you’d like, you might consider switching to one that is more helpful.
You can still switch even if you’re in debt with your supplier, as long as the debt is under £500.
What should I do if I’ve fallen behind with my energy bills?
The first step is to contact your supplier. If you need support doing this ask a friend or family member. Your energy supplier should give you a period of respite and work with you to come up with a payment plan to repay your debts.
Curo’s Money Advice service is also here to support you with any financial worries. Call 01225 366000 or email customeraccountshelp@curo-group.co.uk.