Prepayment Energy Meters - A Quick Guide
How does Prepayment work?
Gas and Electricity prepayment meters work in the same way as a ‘pay as you go’ mobile phones. You pay using a meter card or token, which you add funds to using an electronic terminal, which might be based at your local grocery store or newsagent.
You can also top up at any Post Office and some suppliers such as British Gas, Scottish Power and Utilita even allow you to top up from the comfort of your own home, using a laptop, PC or even your mobile phone via a text message.
The alternative to a Prepayment meter is a Credit or Post-Pay meter. With this type of meter, you use your Gas and Electricity first and then pay when your supplier sends you a bill telling you how much you have used. This could be every month or every quarter.
False: You can’t switch tariffs on a Prepayment meter.
True: You can switch on Prepayment as long as you have debt of less than £500.
You don’t have a huge choice to choose from but you do have options. There are always alternative tariffs, some for instance, allow you to fix your energy prices for twelve months - i.e protected from price rises. Plus, most Prepayment tariffs don’t come with exit fees so you’re completely free to switch to that cheaper tariff.
False: Prepayment is always the most expensive way to pay for your Gas & Electricity
True: Gas & Electricity on Prepayment is similar in cost to Standard tariffs on Post-Pay meters. Post-Pay customers are not guaranteed a better deal if they don’t shop around regularly. Our own figures show that some of our customers are saving almost £500 a year and these are on Prepayment.
False: Paying by Prepayment is a hassle.
True: This is not necessarily true.
You could pay by direct debit but a lot of customers choose not to. If a direct debit gets returned then the associated bank charge could wipe out a big party of any savings, so not choosing this way to pay is perfectly understandable.
Scottish Power and British Gas allow you to top up from your laptop or PC, which is a great option to have if you live some way from your top-up agent, have mobility issues or if your agent’s terminal is unreliable. Utilita even allows you to top up using your mobile phone, via a text message.
False: Suppliers charge different amounts for Prepayment and Post Pay customers.
True: Not completely true. Ecotricity matches its Prepay prices to those of your regional Standard tariff. EBICO just has the one flat rate regardless of which of their tariffs you are on.
False: Once I am on Prepayment then I am stuck on Prepayment
Most suppliers will move you onto Post-Pay for a fee, so you can take advantage of their cheaper tariffs, meaning that despite the fee, you’ll be saving money in the long run by paying for cheaper Gas & Electricity.
British Gas will change the meter for free but will perform a credit check . However, EDF and NPower will charge a fee but will not perform a credit check.
There are other options. Your supplier might be reluctant to send an engineer out to replace your Prepayment meter, however, if you tell them that you will stay with them as a customer if they do then they might be more willing to change your meter for you for free.
Alternatively, you could approach a new supplier and tell them you would like to become a customer of theirs but only if they would replace the Prepayment meter. The new supplier might be keen to replace your meter for you if it means they are gaining a new customer.
If you are planning to move off Prepayment and you have a medical condition such as mobility issues then make sure your supplier is aware of this. The fee might then be waived.
Remember, regardless of whether you are on Prepayment or not it is important to shop around regularly in order to make sure you see the best tariffs available.
If you don’t, then you are effectively paying up to 25 per cent extra for your Gas & Electricity and your supplier uses this extra money from you to fund cheaper tariffs for new customers.
Wouldn't you rather just be one of the new customers?
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A list of Prepayment Tariffs that you can switch away from without incurring exit fees.
Co-operative Energy Pioneer
E.ON Energyplan with Prepayment
Ecotricity Green Electricity+Green Gas
EDF Energy Standard Variable
first:utility iSave Everyday Pre-Pay v3
Ovo Energy PAYG £30 / fuel before 12 months. Free after.
Southern Electric Standard
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