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Costly pre-payment meters leave customers cold

Thousands of people may go without heating and hot water this winter, due to the high cost of using pre-payment meters. But is there anything you can do if you are on a meter?

Research from Christians Against Poverty’s estimates tens of thousands of tenants will not have enough money to feed their pre-payment meter (PPM) over the coldest months of the year. The charity believes many more will be forced to ration their energy use just to keep going.

If you’re on a pre-pay meter, and not sure what you can do, here’s a quick Q&A.

How do pre-paid meters work?

Pre-payment meters work in much the same way as a pre-paid mobile phone, as you need to top it up with credit before reaping the benefits. There are various ways to top up, including from shops that display a PayPoint or Payzone logo, at the Post Office, online or over the phone, and can involve using a smart card, token, code or key.  

Who has a prepayment meter?

More than 5 million homes have a pre-payment meter installed, with the majority being obliged to have one fitted because they failed to keep up with payments.

These meters are also commonplace in rental accommodations, as they take away the burden of chasing tenants for bill payments. For the tenant the only benefit is pre-paying makes it easier for them to keep track on their spending.

However, such advantages pale when compared with the costs of using one when compared to a standard meter.

Pre-payment meters or direct debits?

There are several energy suppliers operating in the pre-payment meter sector, and big savings can be made by switching, according to the energy regulator. Ofgem estimates someone with a prepayment meter could save up to £66 by moving to an alternative PPM provider.

However, even bigger savings, of up to £300, are possible if the customer can move to a standard meter and pay via direct debit.



Can you switch from a pre-payment meter?

It is sometimes, although not always, possible to move from a pre-payment meter to a standard meter and pay via direct debit.

The biggest problem is likely to be the meter removal and installation costs, which could be as high as £160. If this is high enough to make some homeowners wince, it’s even less likely to help persuade landlords to opt for a change.

Before being put off altogether, it’s worth calling your supplier to establish whether they impose a fee and what this will be.

Some suppliers will insist that their customers meet certain criteria to switch to a standard meter, and that they set up a direct debit. These requirements typically include the customer having a current account and being debt free for at least three months.

What if you can’t switch?

If you can’t switch to a standard meter it’s worth considering changing your pre-payment meter tariff. There are several providers, and many have more than one tariff. If you stick with the same provider you won’t face removal and installation costs, which is good news for home owners and for tenants as there is less chance of a landlord objecting.

What do you think?

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  • Patrick / 15 January 2017

    Terrible, these pre payment meters should be banned, companies like Utilita who only deal in pre payment, there millionaire bosses Bill Bullen is his name should hang their head in shame they have call centres and doorstep sellers peddeling these meters to the most vunerable, my neighbour was conned on the phone by a call centre called first contact who sells these meters based in Newcastle I have done research,more expensive and fined by ofgem terrible.

  • Broderick / 27 December 2015

    I moved into my self owned home in 2011. The gas was in a prepay meter. The electricity was on a 'to be read' meter. Both were with SSE. I asked SSEtwice to change the gas prepay meter for a read meter. Twice I was fobbed off, even told the cost worked out the same, which it clearly did not. I tried a third time, and was told by a more amendable operator that as I was already an existing SSE customer at my previous address, they would change the gas prepaid for a read meter for free! Customers should not have to be so persistent.

  • Duncan Thorburn / 27 December 2015

    I have never had a pre pay metre on my electricity, I did on my Gas, but it was taken out, I do not use the Gas central heating, it's too expensive. My electricity Bill is nearly £8,000.00. I said this is impossible, I only heat the room I'm in. So the Meter was changed. The Electricity man changing it, said it is an old Two Rate Meter, the ones that had a Night Time rate. We have not had a boiler for over thirty years. He said the two numbers should add up to this other number, but it didn't, so he said the meter was charging incorrectly. He explained the figures, and I worked out the Meter was 72% over charging. As the Meter has been in the home for over fifty years, it must have been like this for the entire period. I am registered as severely disabled. The worry is too much, what do I do please?

  • Jak Leith / 10 December 2015

    I switched from an EON credit meter to prepayment 2 years ago panicking about the predicted severe winter and knowing I would struggle to cope.
    I'm now paying more for my fuel than I was previously in terms of standing charge and unit price and was told last week that prepayment meters are set on a single tariff and basically it's the folk who struggle who ultimately pay more because the cost of energy to the supplier is then reflected in the cost of our fuel! It's not fallacy when you think you're feeding the meter more than previously, what's actually happening is the supplier is offsetting their higher costs against your supply!
    This seriously needs addressing. It's disgraceful that again, those with less have to pay more for the same fuel as their neighbour using a credit meter . . . it's absolutely disgusting!