MILLIONS of households are on pricey pre-payment meter deals that are set to rise further as energy bills increase.Here is how pre-payment energy customers can cut their costs.
1Around 4.3million people in the UK are on pricey pre-payment metersCredit: Getty
There are two main types of energy meter.
A standard meter tracks how much gas and electricity you use and a supplier will set your bill based on these numbers and how much they charge for each unit of energy .
Another option is a pre-payment meter.
This is where you effectively pay-as-you-go for your energy and top it up using a key, card or app.
Using a pre-payment meter can be more expensive than a standard meter.
Here is what you need to know.
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What is a pre-payment meter
Around 4.3million people in the UK are on pre-payment meters.
They are often installed in homes that have fallen into debt so a customer can manage their bills better or by landlords in some rental properties.
Users have to top up a pre-payment meter in advance in the same way you would make sure you have enough credit on a pay-as-you-go phone.
You can usually top up these meters at recognised PayPoint andPayzone shops or at the Post Office.
Depending on the provider, you may also be able to make top-ups through an app.
What is the difference between being on a pre-payment and standard meter tariff?
Some people find that a pre-payment meter helps them plan their spending and avoid surprise bills.
You only pay for the energy you have budgeted for but it is important to keep the meter topped up so you don’t lose power in the middle of a wash or during the finale of your favourite streaming series.
Pre-payment customers usually spend more on their energy though as the tariffs on offer from suppliers are usually more expensive than standard meter deals.
A household with a standard meter can spread the cost of their energy use each month over the term of a contract and their bill will be more closely related to their usage as long as they provide regular meter readings.
Energy suppliers also often provide discount to customers paying by direct debit, which isn’t available to those on pre-payment deals.
What happens if a pre-payment supplier goes bust?
Energy suppliers offer both standard and prepayment meter deals.
Customers are given the same protections if their supplier fails regardless of the type of meter.
Your energy supply will continue and you can still top-up your meter if your provider collapses.
Energy regulator Ofgem will appoint a new supplier to takeover.
Can you shop around for a pre-payment deal
It is usually possible for pre-payment customers to shop around for better deals on comparison websites to see if you can pay less for each unit of gas or electricity.
But pre-payment meter customers are f …
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