Prepayment meter – should you switch?

Prepayment meter

Approximately four million 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 suppliers.

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.

Your meter will use up this credit until it’s all gone. If you use more energy, the credit will go down faster.

Some people worry that prepayment meters can leave them without power suddenly, forcing them to rush to a payment point. But most modern versions give you a buffer of extra credit to use, giving you time to top up without any sudden surprises.

However, if you are not ready to take that next step into the world of prepay meters, find out how to get the cheapest gas and electricity deals

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.
Prepayment meters PPM Energy

What are the advantages and disadvantages of prepayment meters?

Advantages Disadvantages
You can still switch supplier You may need to pay an exit fees if you leave your contract early
Gives you control over your energy spend You have to keep an eye on the balance
You avoid shock energy bills Limited amount of tariffs to choose from
Your meter is loaded with emergency credit in case you run out If 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 computer The 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?

Not always! Ofgem has announced that energy bills are set to fall by 7% on average from October 1. While this is welcome news, many people will still be paying more for their energy than last winter.

Right now, if you’re on a standard tariff with a prepay meter, you are paying around £2,046 a year based on typical use. But from 1 October, things are looking up for prepay customers. The typical yearly bill will drop to around £1,098 – roughly £15 less than if you were on direct debit. Keep in mind that this number depends on where you live and the amount of energy you use. 

However, the benefit of switching to direct debit is having access to more affordable fixed deals. On the other hand, if you’re tired of the hassle of topping up your meters, switching might be the way to go. 

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.

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.

If you need help with gas and electricity costs, consider exploring the available support options we’ve outlined for you.