Costly pre-payment meters leave customers cold

Updated
Costly pre-payment meters leave customers cold
Costly pre-payment meters leave customers cold


Thousands of people may go without heating and hot water this winter, due to the high cost of using pre-payment meters. But is there anything you can do if you are on a meter?

Research from Christians Against Poverty's estimates tens of thousands of tenants will not have enough money to feed their pre-payment meter (PPM) over the coldest months of the year. The charity believes many more will be forced to ration their energy use just to keep going.

If you're on a pre-pay meter, and not sure what you can do, here's a quick Q&A.

How do pre-paid meters work?

Pre-payment meters work in much the same way as a pre-paid mobile phone, as you need to top it up with credit before reaping the benefits. There are various ways to top up, including from shops that display a PayPoint or Payzone logo, at the Post Office, online or over the phone, and can involve using a smart card, token, code or key.

Who has a prepayment meter?

More than 5 million homes have a pre-payment meter installed, with the majority being obliged to have one fitted because they failed to keep up with payments.

These meters are also commonplace in rental accommodations, as they take away the burden of chasing tenants for bill payments. For the tenant the only benefit is pre-paying makes it easier for them to keep track on their spending.

However, such advantages pale when compared with the costs of using one when compared to a standard meter.

Pre-payment meters or direct debits?

There are several energy suppliers operating in the pre-payment meter sector, and big savings can be made by switching, according to the energy regulator. Ofgem estimates someone with a prepayment meter could save up to £66 by moving to an alternative PPM provider.

However, even bigger savings, of up to £300, are possible if the customer can move to a standard meter and pay via direct debit.

Find out the best ways to pay your bills

Can you switch from a pre-payment meter?

It is sometimes, although not always, possible to move from a pre-payment meter to a standard meter and pay via direct debit.

The biggest problem is likely to be the meter removal and installation costs, which could be as high as £160. If this is high enough to make some homeowners wince, it's even less likely to help persuade landlords to opt for a change.

Before being put off altogether, it's worth calling your supplier to establish whether they impose a fee and what this will be.

Some suppliers will insist that their customers meet certain criteria to switch to a standard meter, and that they set up a direct debit. These requirements typically include the customer having a current account and being debt free for at least three months.

What if you can't switch?

If you can't switch to a standard meter it's worth considering changing your pre-payment meter tariff. There are several providers, and many have more than one tariff. If you stick with the same provider you won't face removal and installation costs, which is good news for home owners and for tenants as there is less chance of a landlord objecting.

More ways to save money on your energy bills

This article is provided by the Money Advice Service.





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