Prepayment Meters and Plans Explained

Prepayment or “prepaid” energy meters and plans require users to pay up front for their energy needs. Energy can be paid for via a number of ways including a card, token, or key which can be purchased from local convenience shops, online or via smartphone apps.

6 million people in the UK currently pay for their energy in this way according to the Department for Business, Energy & Industrial Strategy.

There are many suppliers who offer this type of payment plan, and they often offer different types of tariffs, which give users a little bit of choice.


Why do prepayment meters and plans exist?


Suppliers may move their customers onto these types of plans if they’ve slipped into debt, so this new method will help them budget and manage their household costs better. Below are a list of advantages and disadvantages for this type of the plan. However, on the whole, for most customers, the disadvantages outweigh the advantages.


  • Help customers manage debt and usage
  • Help prevent large and unexpexted bills


  • Often more costly
  • There is less choice in tariffs and plans
  • They are inconvenient to manage
  • Some meters require prices to be updated after recent price rises

If you’ve just moved to a new home with a prepayment meter, register with your energy company as soon as possible to ensure you’re paying the correct rates, as well as ensuring you’re not paying for the previous occupant/s. In addition your circumstances may well be very different, in which case you should be eligible to switch to a standard credit meter.


Can you switch from a prepayment meter and plan to a standard credit meter and plan?


Firstly, it is important to reiterate that prepayment plans are usually a lot more costly compared to other pay monthly/quarterly plans. So if you are in a position to move, it is definitely worth considering doing so.

Switching to a standard plan requires a change in meter. The Big 6 energy suppliers will do this for free (as of April 2016). However, some suppliers may charge a fee for this, so you ought to take this consideration into account when making a decision. If you are unsure, call your supplier to find out what the costs, if any, will be.

If you are looking to move to a standard credit meter and plan, it’s important to consider the below three points:

  • Your energy account needs to be debt free
  • You might have to pass a credit check
  • If you are a renter, you will need to get the landlords permission as this might affect the conditions of your original agreement




As of April 2017 regulators have enforced suppliers to cap prices for those customers on prepayment plans, which came about from a CMA report into the energy industry. Customers could hopefully save up to £80/year as a result of this.

Upload your latest energy bill or enter your postcode now, and see how much you could save by switching away from a prepayment plan.