If you have found this page from the search term ‘Prepayment Meters’ then the chances are that you are either about to have a Gas prepayment or Electricity prepayment meter installed by your utility company, or perhaps you have recently moved into a property which is fitted with a prepayment meter. This section of the Electric Heating costs website will explain to you about Prepayment meters, and perhaps also dispel a few myths.
Prepayment meters are often fitted by utility companies when the bill payer has accumulated a debt whilst on a credit style Electric or Gas Meter, often Gas Prepayment and Electric Prepayment meters are fitted as a last resort or as a result of a court order when the debt has reached the point where there is little chance that the bill payer can afford to pay back the owed amount in a lump sum or over a reasonable period of time.
Sometimes, it is better if the householder chooses to have a prepayment meter fitted voluntarily when they begin to have problems with managing their utility bills, this is because the higher the debt, the longer the period required to pay it back, and the longer the householder will be faced with paying back their debt in small amounts through their prepayment meter. Its usually better to contact your Electricity or Gas supplier sooner rather than later if you begin to accrue a large debt on a conventional credit meter, as the utility company will only apply to the court to forcibly fit a prepayment meter.
Legislation has been passed which makes it very difficult to disconnect non paying customers from the utility networks in the case of repayment or debt problems, therefore fitting a prepayment meter remains the option of choice. Prepayment meters can be programmed to deduct payments towards a debt in the form of installments which are deducted from each credit top up whenever it is physically added to the meter. In the UK, this amount generally varies between £3 and £5 per top up / week.
Therefore, when you top up your meter you may find that a large chunk of the credit that you have added, is immediately used up on the debt installment payment. For example, if your Electricity or Gas supplier has programmed the meter to repay the debt that you owe at £3 per top up, then if you top up your meter with £10 worth of credit, then only £7 actually appears on your meter for use as actual energy credit, the missing £3 having gone towards paying off the debt that you owe.
The advantage of having a prepayment meter fitted, is that it makes you very aware of exactly how much energy your household uses, often on a daily basis, as you can literally see the energy being counted down and eaten away, in the form of the credit vanishing from off the screen. In some households, this actually counts down at a frightening rate, making them more energy aware, especially when it often means a trip into town to top up your prepayment meter, should you suddenly run out of credit.
Prepayment meters are also the energy meter of choice for fitting by landlords, and local councils, who rent their properties to tenants. Again, this is done to protect the landlord from a tenant who may run up a large amount of debt, before moving out of the property, never to return. Previously, many landlords and even new tenants fell victim to those previous bad tenants who not only skipped rent payments, but also left several hundred pounds of unpaid energy bills behind them. If you move into a property which has a prepayment meter fitted, then it is a good idea to check any prepayment meters, just to check that they are not still collecting a debt for the previous tenant.
Older prepayment meters used to be topped up by coin style metal tokens, which were often provided by the landlord, in return for the cash payment. Fortunately technology has moved on and these days prepayment meters are often digital types, which are topped up by way of a smart card, or a special plastic key, both of which are topped up with credit from a shop or post office locally, and then transferred to the meter by placing the card / key into a slot on the actual electricity or gas meter, the credit will then be added to the existing balance, and displayed on he digital display, minus any programmed debt repayments or emergency credit repayments.
Prepayment meters work in a similar way to PAYG mobile phones. Card and Smart Key meters can be topped up at shops, petrol stations and post offices which have Paypoint facilities, simply take your card or key along to your nearest paypoint facility, and hand it over the counter to the operative, along with the request for how much credit that you want adding to the key or card. Then simply pay for the credit, either in cash or with a credit / debit card. Some utility companies such as British Gas, allow you to top up your smart key online, by purchasing credit over the internet, and transferring it to the key using a desktop device which plugs in to the USB socket on the pc or laptop.
All prepayment meters come with an emergency credit facility, which exists for those occasions when you run out of credit at an inconvenient time, such as at 2AM or during the Xmas holidays!. To obtain this emergency credit, will often involve placing your card or smart key into the slot, and pressing and holding a button. The amount of emergency credit that is added to the meter, all depends on your utility company, in the UK, this figure is generally between £5 and £7.50 for standard customers, or £10 to £13 for Economy 7 electricity users with two rate meters. Remember that this emergency credit is not a freebie, and if it is ever activated then it will have to be repaid during your next top up, when it will be deducted from your credit balance.
It is a myth that customers who have prepayment meters fitted, pay more for their energy than customers using credit meters, this used to be the case many years ago but pressure on the utility companies by consumers, charities and anti-poverty groups, now means that prepayment customers, pay exactly the same for their energy as credit meter customers on standard tariffs. However prepayment customers miss out financially in other ways, such as not being able to access incentives such as prompt payment, and direct debit discounts, and may also not be able to access certain direct debit based schemes. It is therefore extremely important that you shop around for the most competitive tariff for your future usage and the easiest way of doing this is to use an energy comparison website, it is also a good idea to try and economise as much as possible on your energy consumption, and some tips on doing this can be found on our Reducing electricity bill page.
I hope that you have found this article on prepayment meters helpful, please leave any comments relating to Gas and Electricity prepayment meters and your own experience of them, in the comments section below.