Pre-Payment Meters – Everything You need to Know to Switch!

Pre-payment meters can be very expensive and inconvenient. Not only do they often charge higher rates for gas and electricity, but they also require users to pay upfront. This can mean periods without power while you ‘top-up’! 

In January 2024, Citizen’s Advice warned that more than two million people could be cut off from gas and electricity because they couldn’t afford to pay for credit. As of 1st October, those who pay for their energy through pre-pay meters saw a further average rise of 10% to their bills meaning the situation could become even worse this winter. It’s estimated that the approximately four million homes that have pre-payment meters installed will now be paying £1,669 a year compared to £1,552 last year.

The charity National Energy Action (NEA) estimated that in October 2024; 6 million UK households were in fuel poverty. This is more than double the official estimate for England alone.

Considering these statistics, switching to a standard credit meter can be a wise financial move for many households if they are eligible. It allows you to be billed monthly or quarterly and can unlock previously unavailable cheaper energy tariffs. It also provides stability and peace of mind knowing you won’t be left in the dark at any given time!

However, this might not be the right decision for everyone. Before switching over, there are some important things to consider.

The Pre-payment Positives

In July 2023, the Conservative Government pledged to end the ‘pre-pay premium’ by bringing prepayment customer bills in line with those paying by direct debit. This means that prepay is now currently cheaper than being on a standard variable price-capped tariff. However, this is predicted to change as more discounted direct debit tariffs are introduced to the market. Prepay deals are likely to remain scarce; meaning direct debit customers who are willing to switch tariffs are estimated to be the ones who will benefit from lower energy bills in the long run. But, if you are unlikely to regularly switch tariffs; it could be cheaper to remain with a prepayment meter!

Making a Switch From Pre-payment Meters

Taking all the above into consideration; if you’re on a pre-payment meter and would still like to make the switch to credit – here’s our quick guide on how to do just that! 

Understand Why You Want to Switch 

First of all; consider why you want to switch and whether a credit meter is the best option for you. Some benefits include:

• Lower tariffs are often available compared to prepayment. 
• You won’t need to top up a card or key regularly. 
• Monthly bills allow you to spread costs over time. 

However, you should also realise that by switching, you are committing to a billing cycle that requires you to manage consistent payments. If you’re comfortable with budgeting for monthly and quarterly payments, then a credit meter could significantly reduce your energy costs. 

Check if You’re Eligible 

Not everyone is eligible to switch from prepayment meters to credit. Energy providers often have specific criteria; these include: 

• Credit Checks – Most suppliers require a basic credit check so they can check that there’s no risk of you not paying. You could be declined if you have a poor credit score. However, some suppliers offer alternatives such as prepayment meter or payment plans so that customers can establish creditworthiness. 
• Outstanding Balance – If you owe money to your energy supplier, they may require you to clear any debt before you can switch meters. 
• Smart Meters – If you have a smart prepayment meter installed, it may be possible to switch it remotely to a credit function without installing a new meter. 

Contact Your Energy Supplier 

Contact your supplier directly and tell them you wish to switch to a credit meter. Here are some of the questions you should ask and confirm with them: 

• Fees to Switch – Some suppliers may charge to change pre-payment meters, so it’s important to check any fees in advance. However, big energy suppliers such as British Gas, EDF, Ovo and Scottish Power now offer free standard meter installations.
• Smart Options – Many suppliers now prefer to install smart meters rather than traditional credit versions. This eliminates the need to take manual readings as it sends the readings straight to the supplier. 
• Tariff Options – You should discuss the tariff options that will become available to you before you switch. Your supplier should be able to provide a comparison between tariffs so that you can make a decision that is right for your circumstances. 

Arrange an Engineer 

 If you need to have your meter changed, your supplier will schedule an engineer to visit your property. Here’s what to expect: 

• The installation usually takes about an hour. Someone over 18 needs to be at the property while this takes place. 
• You should expect a brief power outage while the meter is installed. Make sure you switch off any devices or appliances that may be affected. 
• If your supplier installs a smart meter, this typically comes with an in-home display. This will help you monitor your energy usage in real time and how much you’re spending. 

 New Billing Arrangements 

 Once installed, you’ll go from pay-as-you-go to a billing system. 

• Choosing a Tariff – Initially, your supplier may place you on a standard variable tariff. However, you can request a cheaper fixed tariff or shop around for a cheaper deal. 
• Setting up a Direct Debit – Most providers offer discounts for paying by direct debit. Paying monthly ensures you won’t miss payments and helps you to build up credit with your provider. 
• Billing Cycles – Make sure you familiarize yourself with how you are being billed. This may be monthly or quarterly. 

Compare Energy Suppliers for the Best Deal 

Switching from pre-payment meters will open up a larger variety of energy tariffs. 

• Use a Price Comparison Website – Sites like uSwitch , Compare the Market and Energy Helpline let you access and compare available tariffs quickly. 
• Fixed vs. Variable Rates – Consider which tariff is best for your circumstances. Fixed-rate plans secure a set price for a period; this is usually 12-24 months. Variable rates can fluctuate based on market prices. 
• Green Energy Options – Some suppliers offer 100% renewable energy tariffs. This is very appealing if you want to reduce your environmental impact. 

Monitor Your Usage 

 Once you move to a credit meter, your bills will be based on your actual consumption. You can avoid any unexpected costs by: 

• Tracking your Usage – Use your in-home display to keep an eye on your daily usage. 
• Submit Regular Meter Readings – If you aren’t on a smart meter, make sure you submit regular readings to avoid estimated bills which can be higher than actual usage. 
• Set Energy-Saving Goals – You can achieve savings overtime by reducing your energy consumption even by a small amount. 

Consider Switching Energy Suppliers if Necessary 

After you’ve switched, if you’re unsatisfied with your current provider’s rates, you should consider changing suppliers. You will now have more flexibility to explore options and negotiate better deals. 

What if you Change Your Mind? 

You can switch back to a prepayment meter if you change your mind. However, it is important to know that there may be additional fees, and it can be a complicated process. Some suppliers also don’t allow frequent changes between meters. 

To Switch or Not to Switch… 

The benefits of switching from pre-payment meters to standard credit meters can save you money and help you to flexibly manage your energy costs. Hopefully, our guide will help you make the best decision for your own household circumstances. If you take time to understand the process, work with your supplier and explore competitive tariffs beforehand, you can get the most from making the switch to credit and leave your prepayment days firmly behind!