Prepayment meters are energy meters that let you prepay for gas and electricity. You can top up your energy via a smartcard at your local post office, newsagent or online.
Over four million homes in the UK use prepayment meters. This type of tariff is common in rental properties since landlords use it to keep tenants on top of their energy payments.
A prepayment meter may be beneficial for you if youve previously struggled to pay your energy bills, and fallen into debt with your energy supplier.
Prepay customers pay more
If youre on a prepayment meter, youll pay more for gas and electricity than customers who pay a monthly bill via direct debit. On average, prepayment meter customers pay Â£100 more than monthly direct debit customers for a dual fuel tariff from the same provider.
Its easy to understand why prepay customers will want to switch to a cheaper supplier to save money.
Advantages and advantages of prepayment meters
Prepay meters make it easier for some consumers to manage their budgets more effectively. By prepaying for energy, theres little chance for getting into debt.
The downside to prepay meters is that if youre unable to top up your smart card on time, youll find yourself without gas and electricity.
Another disadvantage is that prepay costs are higher than standard meters since the best tariffs are reserved for monthly direct debit customers.
Use your meter the right way
If you must stay on a prepaid plan at least for a while use these tips to make the most of your prepaid meter.
Use less energy: Dont worry so much about getting the best deal that you forget that the biggest way to save is to reduce your energy consumption.
Use emergency credit only when needed: Your supplier will provide Â£6-10 of emergency credit for those times when your top-up runs out. While this can be a lifesaver, there are extra charges associated with this credit. Limit your use of emergency credit if you want to stay on budget.
Leave enough credit to run your appliances while youre away on vacation: Dont forget that youll need to have sufficient credit on your meter to cover daily charges if youre going away. Without it, your appliances will switch off while youre gone.
Notify your provider if you have to move: When youre moving into a home with an existing meter, you should notify the supplier and ensure that they reset the meter as soon as possible.
Watch out for fraud: You may think youre getting a good deal when you pay Â£25 for Â£50 of credit, but you might end up losing. There are many unscrupulous people selling bogus cards for less than market value. Dont get taken in by these fraudsters.
Keep your card safe: Replacement cards will cost you about Â£10 if you lose your card. The good news is that some providers will transfer your credit from the misplaced to the new card.
Switching to a standard meter
Your provider will confirm whether its possible to switch from a prepaid to a standard meter. There are usually charges imposed for changing your tariff, and youll have to clear any outstanding debt before they upgrade your account.
Your landlord will also have to approve the request if youre a tenant. The changes cannot be made without the landlords permission.
To make the switch and save money, you should compare gas and energy tariffs in your area. Comparison sites provide side by side comparisons of the offerings from various suppliers, based on location and other variables.
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