Can I change my prepayment meter?

On the subject of changing prepayment meters, our expert says...

Thanks for your question about changing your prepayment meter. Prepayment meters are marketed towards those on low incomes. However, millions of people have had them installed only to find that they’re more of a burden than a benefit.

According to charity National Energy Action (NEA), there are 5.8million prepayment meters in use in Great Britain, and tariff rates are often the most expensive on the market. But NEA suggests prepayment meter customers are generally on lower than average incomes, with 21% of gas consumers on an annual income of less than £10,000.

Here's a brief guide on switching prepayment meters:

Switching prepayment meters

Your first option is to consider reducing your energy bills by switching to a prepayment tariff with another energy supplier. Energy regulator Ofgem estimates that the average prepayment customer can save up to £100, even by staying on a prepayment meter but simply switching to a different supplier. So your switch could pay for itself in a year.

If that doesn’t appeal and you are still set on changing your meters, you will probably have to pay a fee for an engineer to come out and install a standard meter, and this can be quite expensive. E.ON (www.eonenergy.com) for example, charges £100 to swap meters, and you have to be a customer with them for 12 months before you can switch.

You're very unlikely to be able to find a supplier that will change your meter for free, whether you are the original tenant of the house or have just moved in, but it's worth finding out what different suppliers charge. You may also have to pay a security deposit, as some suppliers will run a credit check on you, in case you run up any debt as a standard meter customer.

Though the up-front charge from your supplier may seem a lot, in the long run you’ll benefit from the cost savings on the new tariff options available to you.

What are the advantages of a prepayment meter?

For people who want to manage their household spending, there are two advantages of using a prepayment meter:

1. You pay for your fuel as you use it, so therefore won’t spend what you can’t afford
2. You can repay any outstanding debt with your energy supplier at an agreed weekly rate.

What are the disadvantages of a prepayment meter?

Sadly prepayment meter customers are unable to take advantage of online energy discounts, or set up a tariff with money-saving direct debit payments, so often end up paying a higher rate for their gas and electricity than customers on standard meters.

Prepayment meter recommendations

If you’re adamant that you want to change your prepayment meter for a standard meter to take advantage of cheaper payment methods and tariffs, I recommend that you switch to the supplier’s standard tariff first, then look into switching supplier and tariff after a month, to save money.

For anyone who is worried they’ll lose control of their finances by changing their prepayment meter, then it might be worth sticking with it, however you will be paying extra for your energy.

It might be also worth contacting your energy supplier to see if they offer a tariff for vulnerable customers, such as a social tariffs, to help you keep up with your energy bills.

Hope this helps you switch from a prepayment to a credit meter tariff Andrew!

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