What is a prepayment meter and how do they work?
A prepayment meter (PPM) lets you pay for your gas and electricity before you use it. This is achieved by topping up a key (electricity) or card (gas) with credit and inserting it into your meter.
Prepayment meters allow you to have better control of your energy usage, as you can monitor how much you spend on your energy. And if appropriate, it can help you repay any outstanding debt in affordable weekly payments.
New to prepayment meters? Download our easy to use guide (PDF).
We offer one variable prepayment tariff which includes two charges:
- Standing charge – a daily fee which covers the cost of keeping you connected to the network, meter maintenance and engineer visits
- Unit rate – the price you pay for each unit (kWh) of gas or electricity you use based on the tariff unit rate
There may also be a weekly charge of any outstanding debt you have left to pay.
- Pay as you go for your energy, meaning no large and unexpected bills
- You can easily monitor how much you spend on energy
- Emergency credit is available to help stop you going ‘off supply’
- You only need to submit an opening meter reading
- There are no exit fees, so you can switch supplier anytime (if you have no outstanding debt to pay)
- If applicable, you can pay off any existing debt in affordable weekly amounts over an agreed amount of time
- Prepayment tariffs are usually more expensive than paying by monthly Direct Debit
- Your energy prices may go up or down depending on Ofgem’s price cap (more information on this below)
- You will not receive any Direct Debit discount, dual fuel discount or paperless billing discount
- Topping up your key or card at your local Paypoint, Payzone or Post Office can be inconvenient. Especially during a public holiday or over the Christmas season
- If your key or card gets damaged or lost, you may be charged for a replacement
- If you can’t top up your meter and you’ve used your emergency credit, your energy can be switched off until you repay the charges and your meter’s in credit
- You’re likely to pay more than normal credit meters during the colder months as you use more energy
- When going on holiday, you must remember to top up enough to cover the daily standing charge
As prepayment tariffs are generally the most expensive, the price you pay on a prepayment tariff is capped by Ofgem. This means that there is a maximum price that suppliers can charge customers who are on standard variable and prepayment tariffs.
Ofgem reviews this price cap every six months in April and October. We then review our own prices to make sure they are in line with the cap – meaning prices may go up or down depending on the new price cap.
Before changing to prepayment, we suggest making sure that this is the best choice for you.
Prepayment meters can be useful for anyone who struggles to pay their energy bills. As paying as you go for your energy can reduce the risk of falling into debt.
But prepaying for your energy is often more expensive than paying by Direct Debit, for example.
Find out how to exchange your prepayment meter.