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Prepay energy customers pay £226 more a year

With July temperatures hitting an all-time high, your windows and doors are probably open wide and heating the last thing on your mind.  Yet anyone on a prepay energy meter shouldn’t ignore the fact they’re paying more for their gas and electricity.

The average difference in price between someone who pays by Direct Debit and someone using a prepay card or key is a staggering £226. The comparison between the different companies by Citizens Advice also found the widest gap in annual cost is a huge £405.

This extra expense is made worse by the fact 80% of households with prepayment meters are already in debt, according to Ofgem figures analysed by Citizens Advice.

However, there are ways most people with a prepayment meter can save. Even if you prefer a prepayment meter to help you budget you might be able to save on average £66 by switching supplier. But for the really big savings switching to a regular meter and paying by Direct Debit could bring far bigger savings.

If you have a prepayment meter, here's more detail on the ways you might be able to bring down your costs.

Switch to a regular meter

For many who have a prepayment meter, it’s simply the case they’ve moved into a property and a prepayment meter is already there. As long as you are paying the energy supplier directly and not via your landlord, you can apply for a regular meter.

Doing this would mean you’re eligible to move to a much cheaper tariff and pay by Direct Debit.

You’ll probably be credit checked, which could be a problem if you’ve a poor credit rating.

Some companies will also charge you for installing a meter, and you may need two – one for gas and one for electricity. You might also have to stay with your supplier rather than switch to the cheapest deal available.

However, you could still be saving money overall – just make sure you work out what you can afford.

Search for a cheaper prepayment rate

If your credit history or cost of getting a new meter installed stop you moving to a regular meter, that doesn’t mean you can’t find a better deal.

You can switch between prepayment suppliers in the same way you would if you had a regular meter. The amount you’ll save won’t be as much, but it’s worth exploring, especially as Ofgem recently found more suppliers than ever before are offing a prepayment tariff.

Look for help with your debts

Many households with a meter are often put onto one by an energy company to repay money owed. If you have energy debts of more than £500, your supplier might stop you switching.

Of course, if you’re struggling to repay fuel debts, you’re probably also struggling with other bills. The best possible option is to seek some advice as early as possible – and it doesn’t need to cost you anything.

The Money Advice Service website has a debt advice locator tool which will find you free and confidential help local to you.

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  • Vswitch usave / 19 April 2017

    Being a prepayment meter customers doesn’t mean you have to pay more than necessary. Save money on energy bills by switching to credit, post-pay and other profitable energy deals. Apart from this your energy supplier matters a lot when it comes to switching for the new meter. British Gas, EDF Energy and E. ON all carry out the switching process free, while SSE and Scottish Power charge upwards of £45 per fuel to switch you over. NPower will remove prepayment meters free, but only if the meter is from your old house.

  • Julie / 26 July 2015

    I recently had my prepayment meter removed and it cost me £60.00 to do this. If you are in receipt of any gov benefits it could be free to change however suppliers are reluctant in case you can't afford to keep up with payments. I am waiting for my first bill then I plan to swap suppliers. Most providers will not let you swap if you have a prepayment meter. I f

  • Janet Brown / 4 July 2015

    It's not true about pre payment meters. We are with ecotricity and it is the same price as somebody who pays by cash who does not want a DD. But you fail to mention that the unit prices are the same ad cash customers.