Prepayment energy meter tricks you should know if you pay for your energy in advance

Energy bills are set to skyrocket for around 4.5 million households with prepayment meters. If you have this kind of meter, follow these tips for how you can keep your energy bills as low as possible

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Follow these prepayment energy meter tricks to keep your bills as low as possible when the higher energy price cap (opens in new tab) comes into effect. 

Around 24 million households will be worried about how much their energy bills will cost (opens in new tab) when the new cap comes into force on 1 October 2022. Out of those 24 million households, around 4.5 million have prepayment meters at home. 

Prepayment meters are designed to let you manage and control how and when you pay for the energy you use. But a major downside is that prepayment tariffs are more expensive than deals available for those on standard meters, meaning your money can run out quickly. There are also fewer tariffs and suppliers to choose from. 

Sofia Hutson (opens in new tab), energy expert at Compare the Market, says: “Households that use a prepayment meter are essentially purchasing energy directly from the supplier at that moment in time. 

“This means it is difficult for the supplier to accurately predict exactly how much energy the household will use in the same way they would for a household paying via direct debit. This means suppliers need to factor in this unknown element and the cost is usually passed onto households on prepayment meters.”

If you pay for energy using a prepayment meter, there are steps you can take to minimise how much you spend. 

Don't forget you will also benefit from the government's £400 energy rebate (opens in new tab) that is due to be paid from October. 

7 prepayment energy meter tricks you should know

1. Use less energy

It might sound obvious, but the easiest way to keep your energy costs down is to use less energy at home.

Solar Panels Network founder Alan Duncan (opens in new tab) says: “One of the best ways to save money is to only use energy when you need it. For example, during the daytime, you can open curtains and blinds to let natural light in. This will help reduce your reliance on artificial lighting, which can add up quickly on your bill. Additionally, unplugging devices that are not in use can also help lower your energy consumption.”

Research by pay as you go energy supplier Utilita Energy found that households reliant on oven cooking could save up to £604 per year by switching to more energy efficient cooking methods. It found that air fryers and microwaves are the cheapest to run. 

 2. Get a smart meter installed for free

Energy companies are currently rolling out smart meters (opens in new tab) to all UK households. You can get a smart meter whether you have a post-pay or prepayment meter.

A spokesperson for Utilita Energy says: “If a household has an old-style prepayment meter, they should request an upgrade from their supplier. An upgrade would make them smart-enabled, meaning they can top-up remotely – even via a smartphone app – rather than needing to pop to the local shop, for example.

“If they are already smart-enabled, they should be able to see what they are using and spending, which will have an impact on their usage. When you can see, you can save.” 

Utilita says its customers reduce their energy use by an average of 11% after becoming smart-enabled.

3. Top up at the right time

It might be possible to save money on electricity by topping up your prepayment meter to the maximum possible before the next price rises take effect (1 October in this instance). Doing so will mean you get charged at the old unit price for longer, saving you cash.

However, there has been some conflicting and confusing information circulating about this money saving tactic. The latest research from MoneySavingExpert.com (opens in new tab) (MSE) suggests this trick may work if you have an old-style (not smart) prepayment electricity meter with any supplier except Scottish Power or E.ON. MSE founder Martin Lewis thinks it might work best with British Gas, Octopus, Shell Energy and Bulb meters, but there are no guarantees

4. See if you qualify for energy vouchers

Check if you are eligible for any gas and electricity vouchers (opens in new tab) to help you pay your bills.

Sue Anderson (opens in new tab), head of media at debt charity StepChange, says: “Households with prepayment meters may be eligible for fuel vouchers that they can use to top up their energy.

“The vouchers are available through some food banks and other local support organisations, and you'll need to have been referred by an advice provider, GP or similar.”

The vouchers are worth up to £49 and funded by charity the Fuel Bank Foundation. Eligibility criteria varies from organisation to organisation, but you normally need to be claiming benefits or on a low income.

5. Switch to a credit meter instead

You’ll have access to cheaper energy tariffs if you switch from a prepayment meter to a standard credit meter.

Speak to your energy supplier if you want to make the switch. It’s normally quite straightforward, and your new meter should be installed for free. 

“While they can be helpful for monitoring usage and expenditure, prepayment meters are usually the most costly method of paying for energy and consumers also have to pay a standing charge even when not using their energy,” says StepChange's Sue Anderson, “People are generally moved onto prepayment meters due to energy arrears and suppliers can add debt repayments to the meter which can mean energy top-ups end up repaying debt rather than providing much needed energy.” 

6. Switch supplier

If you prefer to stick to a prepayment meter, you might be able to save money by switching to a different supplier offering a prepayment tariff. 

However, the energy crisis means it’s not a good time to switch suppliers at the moment – but it’s something to bear in mind for the future.

7. Claim money from the Energy Bills Support Scheme

Almost every household in England, Scotland and Wales will receive a £400 energy grant later this year. 

Most billpayers will get the discount automatically applied to their accounts, but those households with old-style prepayment meters will need to collect and redeem a discount voucher instead.

How do prepayment meters work?

Most people pay for gas and electricity after they use it, paying by either direct debit or on receipt of a bill. But households with a prepayment meter pay for energy before they use it, with a set up similar to a pay-as-you-go (PAYG) mobile phone. 

Those with a prepayment meter need to buy credit and load it onto key or smartcard which they then insert into their gas or electricity meter. Some of the more modern prepayment tariffs use a smartphone app for top-ups. The credit is used each day for standing charges and also for each unit of energy used. 

How much more expensive are prepayment meters? 

Many people like prepayment meters as it helps with budgeting, but prepayment tariffs are more expensive than post-pay tariffs. This is because energy companies only offer their cheapest tariffs to customers who pay by direct debit.

The energy price cap is higher for prepayment customers too – the standard price cap set by Ofgem will be £3,549 from 1 October but for prepayment customers it will be £3,608, £59 more.

I can’t afford to top up my prepayment meter – what should I do?

If you can’t afford to top up your meter you can normally get up to £10 emergency credit. However, this will be paid back to your supplier the next time you top up. 

If you run out of credit, ask your supplier for help. It may give you temporary credit if it agrees you're ‘vulnerable’ because you have a health condition, a young child, or if you’re struggling financially. 

If you’re on a low income, you should check that you’re claiming all the benefits you’re entitled to. Organisations such as Citizens Advice and StepChange can help if you’re struggling with debts.

You may be entitled to other support too. People on certain benefits are due to receive the £650 cost of living payment, while many people will also be able to claim the Warm Home Discount, or Winter Fuel Payment. Others may qualify for more help from their energy supplier

We know this is a difficult time for many people as household budgets come under pressure. If you need to talk to someone, there is free support from the Samaritans (opens in new tab). You can call for free on 116 123.