Prepayment meter – should you switch?

Prepayment meter

An estimated 16% of all customers in the UK are currently using prepayment meters, according to the energy regulator Ofgem.

Let’s take a look at how they work, how to switch to a credit meter and how to change supplier.

What is a prepayment meter?

A prepayment meter (also known as ‘token’ or ‘key-card meter’) allows you to pay for your energy before you use it.

With a prepayment, or ‘pay as you go’ tariff, you pay for your energy by adding money to a ‘key’ to top up your electricity meter and a card to top up your gas meter. This is then inserted into the meter, ready to be used.

Why do I have a prepayment meter?

Prepayment energy meters are often installed to help customers manage debt and budget more effectively.

If you are moving into a house with a prepayment meter, you should contact the supplier right away and ask them to:

  1. Clear the previous tenant’s debt off the meter
  2. Send you a new prepayment key or card so you can top-up the meter (they can also arrange for you to pick one up from a local PayPoint and Payzone)
  3. Explain whether you can change your meter from prepay to credit

Gas and electricity

What are the advantages and disadvantages of prepayment meters?

You can still switch supplierThe unit rates tend to be more expensive
Gives you control over your energy spendYou have to keep an eye on the balance
You avoid shock energy billsLimited amount of tariffs to choose from
Your meter is loaded with “Emergency Credit” in case you run out of creditIf you run out of emergency credit, you’ll go off supply
You can get a smart prepayment meter installed, allowing you to top up from your smartphone or computerThe inconvenience of having to top-up
If you have an older meter it will need to be manually updated after price changes, meaning you could be overpaying or underpaying for some time

Are prepayment meters more expensive? 

Unfortunately, prepayment tariffs are often more expensive than credit meters.

Our research finds that two-thirds of Big Six credit tariffs were cheaper than their offered prepay tariffs.

The rate charged per kilowatt of energy used tends to be higher meaning that for the same amount of energy, you would be paying more than somebody who has a credit meter.

This is of concern given that 87% of these households with prepayment meters were on benefits.

What is the prepayment cap?

The prepayment price cap (sometimes called a ‘safeguard tariff’) limits how much a supplier can charge you per kWH of electricity or gas.

The cap aims to ensure you pay a fairer price for your gas and electricity and to protect against overcharging.

But when suppliers are forced to lower the cost for those paying more than the price cap, they plan on raising prices for those below it to subsidise the cost.

Unfortunately over 90% of prepayment meter customers are on tariffs priced close to the prepayment tariff price cap.

You can find out more by reading our price cap article.

How can I change my prepayment meter to a credit meter?

To change your meter you would need to contact your supplier to book a meter exchange appointment. If you’re a tenant, you will need to seek permission from your landlord first.

To be eligible, your energy account will need to debt free and you may need to pass a credit check. If you don’t satisfy the requirements, suppliers will refuse your request to switch to a credit meter.

If your current supplier is one of the Big Six (British Gas, E.On, SSE, Scottish Power, EDF or Npower), and you are eligible for a credit meter, you can get the meter switched out for free.

Otherwise, you may be charged a fee so depending on the cost, it might be worth switching to one of the Big Six to change your meter.

If you’re a vulnerable customer, dependent on any medical equipment who relies on electricity for health or medical reasons, your supplier should exchange your meter free of charge. We’d also advise registering for the Priority Services Register.

Join over 500,000 members and stop overpaying for your gas and electricity now!

By ticking here, you agree we can send you occasional emails with incredibly helpful money saving tips.
Our privacy policy outlines how we use your data and where it goes. Please make sure you read it before moving ahead with the enquiry.

Can I switch suppliers with a prepayment meter?


Consumers in vulnerable circumstances are likely to be paying more for their energy than is necessary.

Even if you owe up to £500 of debt, you can still switch to a new supplier with a prepayment meter. When you switch you’ll owe your debt to your new supplier.

So who should you switch to if you have a prepayment meter?

Look After My Bills can help you find the best deal!

We’re an energy switching company and we know automatic switching is the simplest way to save money on your energy every year.

We use clever algorithms to find you the best deal on the market according to your usage and energy meter type.

Sign up to Look After My Bills, and we’ll switch you if we can find you a saving!

Not heard of auto-switching before? Click this link to find out how auto-switching works.


Was this answer helpful?