What's happening with prepayment meters?

What's happening with prepayment meters?

The government has announced plans to provide additional financial support for energy customers with prepayment meters. If you have a prepayment meter, or are considering getting one installed, we're here to help you understand the upcoming changes with a quick breakdown of the latest news.

What is a prepayment meter?

Now, before we get started, let’s talk about what a prepayment meter (PPM) is. A prepayment meter is an energy meter where you pay for energy before you use it by topping up with a prepayment card or key. This type of meter is also known as a pay-as-you-go meter. Learn more about prepayment meters and how to top up your credit. Often, if you don’t have a PPM in your home, you will have a credit meter, this is where you pay for your energy after you use it. One of the most popular payment methods for credit meter customers is Direct Debit. Find out more about what Direct Debits are and how they are calculated.

The government to provide additional support for PPM customers.

From 1 July 2023 to 31 March 2024 the government helped 4 million households with prepayment meters save on their energy bills. They introduced a unit-rate discount to pay-as-you-go customers through the Energy Price Guarantee. The discount covered the additional costs needed to manage PPMs. These costs were being passed on to prepayment customers through higher unit rates and standing charges when compared to Direct Debit customers. From 1 April 2024 prepayment customers and Direct Debit customers covered by the price cap will pay the same standing charge, known as ‘levelisation’. This policy replaces the support through the Energy Price Guarantee which expired at the end of March 2024. The introduction of a levelisation allowance within the price cap will mean that Direct Debit customers will typically pay £10 more per year. However, prepayment customers will typically pay £49 per year less (or £52 per year less including VAT).

The specific prepayment standing charges each customer sees will vary by region. The discount will be applied automatically to the price that is set on the meter. You do not need to contact your supplier to apply or use vouchers.

Learn more on our help and support for prepayment meters.

Struggling to pay.

If you are struggling to pay your bills we are here to support you. From free debt advice from our partner StepChange, to grants from the E.ON Next Energy Fund that will help you pay your energy bills or replace essential appliances. Find out more about the support on offer and see if you are eligible for help with your energy bills.

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Published 25/06/2023