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There are almost 6 million people on prepayment (pay-as-you-go) meters across the country. A prepayment energy meter is a type of domestic meter which requires the user to pay for energy before they use it. This is done through a smartcard, key or token which can be 'topped up' at any Post Office, PayPoint or Payzone. If you have a Smart prepayment meter some suppliers (such as RAM Energy) offer online and over the phone top ups. 


Who has prepayment meters? 

Anyone could have one, or move into a property with a prepayment meter. Here are some examples where prepayment meters may be fitted:

  • Rented properties - some landlords have prepayment meters in their properties so tenants can't pass on an energy debt when they leave the property. 
  • Properties where a person may struggle to keep up with their payments - a prepayment meter may be installed by the energy supplier to help the customer control their usage and budget. 


What are the pros and cons of prepayment meters? 


  • Helps customers to manage their energy usage and any debt. 
  • Helps prevent large or unexpected bills.
  • Helps customers avoid getting into debt with their energy provider. 


  • Above average cost for gas and electricity. Some of the best energy deals on the market aren't available to prepayment customers. 
  • They can be inconvenient as you have to go to a Post Office, PayPoint or Payzone to top up your meter (smart prepayment meters with RAM Energy remove this problem as we offer online or phone top ups). 
  • If you can't go out to top up your key or smart card your energy could run out leaving you with no power, called self-disconnection. If this happens you normally have to repay any emergency or outstanding credit before it is switched back on. Most energy providers offer emergency or friendly credit in this scenario to prevent self-disconnection, especially when call centres are closed. 
  • A credit meter with fixed tariffs allows you to spread the cost of your energy evenly over the year so you don't pay more when your energy use increases during the winter. Prepayment meters on the other hand do not allow for this so it can sometimes be a struggle to find the extra money during the colder months to top up, especially for those on a tight budget. Alternatively, you can build up a buffer during the summer months by topping up more than you need to, this can then be used over the winter when usage increases. 


When can a supplier install a prepayment meter? 

Energy suppliers usually install prepayment meters when the home has slipped into energy debt. The meter can help the customer manage their debt and budget more effectively for the energy they use. If you have to switch to a prepayment meter because your in debt, you'll be able to pay off your debt a bit at a time alongside paying for the gas and electricity you use. 


Where can I get a credit meter instead of a prepayment meter? 

Firstly, speak to your current energy provider and check if you're eligible for a credit meter. This may involve the supplier running a credit check to help them decide if you'll be able to keep up with the monthly payments. If you have a poor credit score the provider may reject your application. If you pass, an engineer would need to come to your property to install a credit meter, or if you have a smart meter already installed your supplier should be able to remotely change your meter to credit mode. Each supplier has their own policies for this and you may be charged a fee to cover the installation costs.

RAM Energy is a little different; we do not perform any credit checks on our customers. Instead we monitor your meter for 3 months (smart meter) or 6 months (traditional meter) and if you do not use your emergency credit during this time we'll give you the opportunity to move onto a credit meter. You can also call and ask us! The installation is completely free of charge. You can then call us to discuss which credit tariff would be best for you to move onto. 


Why is a prepayment meter typically more expensive than a credit meter?

The cheapest prepayment tariffs were found to be £260-£320 a year more expensive than those available to customers on credit meters paying by direct debit, as reported by the Competition Markets Authority (CMA) after a two-year investigation.  

The Safeguard tariff Ofgem have introduced places a price cap on the amount an energy provider can charge prepayment customers. Between 1st April and 30th September 2018 energy providers cannot charge more than £1,089 a year for the average energy user. Although the amount prepayment customers pay is now capped, it doesn’t mean this is the best rate available.

With credit meters you typically pay for the energy after you have used it, which could be monthly or quarterly. Credit customers have the option to choose from some of the best fixed tariffs on the market with cheaper unit costs. They can also take advantage of supplier discounts for online billing or discounts for paying by direct debit. 

prepayment tariff breakdown table

Table based on the average energy user who uses 3,100kWh electric and 12,000 kWh gas a year. RAM Energy Fixed Plus tariff with online billing and direct debit payments. Figures true 14th March 2018. 


Ready to see if you can switch and save with RAM Energy? 


Sources: UKPower, uSwitch, Energy UK, Money Supermarket