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Decide if prepayment is right for you

This advice applies to Scotland

Prepaying for your energy lets you pay small amounts often, but it’s usually a more expensive way to pay than getting a bill.

If you have a smart meter, your supplier can change its setting from credit to prepayment.  If you have an old-style credit meter, you can swap it for a smart meter or get an old-style prepayment meter installed.

If you have a choice about moving to prepayment, think about how it'll affect you.

You could end up with no gas or electricity

You shouldn’t move to prepayment if running out of credit and having no gas or electricity would cause you a serious problem. For example, if you have:

  • a long-term health condition
  • a disability
  • medical equipment that wouldn’t work
  • young children

If you have impaired hearing or sight, you might find it hard to hear an alert or read the meter. 

You’ll need to top up your credit

If you have a smart meter in prepayment setting, you can top up online or through an app on your mobile phone. You could get a smart meter if you’d find it hard to get to a top up point, for example if you’d have to travel a long way.

If you have a prepayment meter, you'll need to buy credit for your meter from a top-up point - often a local shop or post office.

You won't be able to get the best deal

With an old-style prepayment meter you'll pay more than you would on the best direct debit deal. There are also fewer tariffs and suppliers to choose from.

If you want to save money on your gas and electricity, it’s usually better to switch to a different supplier and keep your old-style credit meter.

If you look on a price comparison website, you won't find as many tariffs as usual - this is because many energy companies are struggling. If you don’t find a better tariff than the one you’re already on, it’s probably better to wait until deals are available again.

You’ll pay a daily fee

As well as paying for the gas and electricity you use, you pay a daily fee for being connected - known as a standing charge. You pay this with a normal meter too, but when you're on prepayment you need to have credit to pay it - even on days when you don’t use any gas or electricity.  

You still have to pay the daily standing charge even if you don't have any credit on your meter. When you next top up, you'll have to pay back all the standing charges that you owe.

The amount of the standing charge depends on where you live and what tariff and supplier you have. It’s usually around 28p a day.

Jacintha’s story

Jacintha has gas central heating, which she switched off last summer.

She didn’t top up her gas meter because she wasn’t using any gas.

The meter still took 28p a day for the standing charge, so she soon ran out of credit.

The standing charges built up until Jacintha decided to add some credit because she wanted to switch her heating back on.

By this time Jacintha owed £17.64 in standing charges. When she topped up by £20 the meter took what she owed and she only had £2.36 left. This meant she had to top up again the next day.

Next steps

If you don't want to move to prepayment but your supplier wants you to, you might be able to keep paying for energy after you use it

If you want to move to prepayment, you might want to get an old-style prepayment meter installed

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