Consumers can pay for their energy before or after they use it. Most people choose a monthly direct debit at the end of the month. People who want to monitor their home energy usage can opt for pre-payment meter tariffs.
The difference between pre-payment meter tariffs, fixed tariffs, and variable tariffs can be confusing. We empower home energy consumers by clearing up the confusion around tariffs, meters, and suppliers. Our experts know everything there is to know about smart meters, and can even find you the best energy deal on the market.
What Is a Pre-Payment Meter?
Smart pre-payment meters have grown in popularity in recent years. Around 4.3 million UK homeowners have a smart meter. In simple terms, pre-payment meters offer homeowners an opportunity to pay for their energy before they use it.
These types of meters are often referred to as pay-as-you-go meters. They are a lot like pay-as-you-go phones, which people can top up whenever they need more credit. We recommend pre-paid meters for people who want to monitor their usage.
Most suppliers will install meters into their customers’ homes for free. Once installed, it is the customer’s responsibility to ensure that there is enough money (or ‘credit’) on the meter. If there is no money on the meter, they cannot access gas or electricity.
Can I Save Money With Pre-Payment Meters?
Pre-payment meter tariffs are different from traditional tariffs. With traditional fixed and standard variable tariffs, customers pay at the end of the month via direct debits. Suppliers use their customers’ yearly usage to calculate their yearly spending, divide the number by twelve, and bill them at the end of the month.
This method depends on home energy customers sending regular meter readings. If they do not send meter readings, suppliers can only estimate their usage. Estimated usage can cause a lot of problems. More often than not, it is based on the historic energy consumption of buildings in the area.
If you miss a meter reading, you could be in credit. People are in credit when their suppliers charge them too much. If your supplier goes bust and stops trading, you might not be able to claim the credit back from your new supplier. Even if your current supplier continues trading, you will have to wait until the end of the year to get your money back.
Pre-payment meter tariffs eliminate this problem. However, they are often more expensive per unit. The good news is that Ofgem has implemented a cap on pre-payment meter bills.
What Pre-Payment Meters Are Available?
There are three types of pre-payment meters available.
Depending on the energy supplier, you will have a key meter, smart card meter, or smart pre-payment meter. Older meters use tokens and coins. Modern meters allow homeowners to add credit through online apps. Before digital credit became commonplace, homeowners had to add money to their smart cards or exchange money for tokens at local shops.
How Do I Get a Pre-Payment Meter?
In 2020, the government set out plans to offer all eligible homeowners a smart meter. This programme will help the government meet its goal of delivering net zero emissions by 2050. Switching to smart meters can cut carbon emissions by up to 45 million tonnes.
Home energy suppliers in the UK are obligated to offer you a smart pre-payment meter. The big six suppliers in the UK will swap your standard meter for a smart meter for free. If you are currently with British Gas, Npower, E.ON, British Gas, SSE, or Scottish Power, you do not have to worry about installation costs.
Lots of suppliers are also happy to offer free smart meter installations in exchange for new customers. People who want to enter into a pre-payment meter tariff with a new supplier should take advantage of these deals. Right now, OVO Energy and Bulb are just two of the suppliers that provide new customers with free smart meters.
Smart Pre-Payment Meters
All home energy consumers have a meter. Consumers must take regular readings and send them to their suppliers. Doing so allows suppliers to monitor usage and estimate bills. If residents fail to send meter readings to their suppliers, they might have to outlay money on inflated estimated bills.
Smart pre-payment meters are the next generation of meters. They automatically record energy usage and send it to suppliers. One of the main benefits of smart meters is that they come with an in-built display. Consumers can see their usage in real-time and act fast to reduce it.
Smart meters are ideal for people who want to see whether or not their energy-saving hacks are working.
How to Switch Home Energy?
The energy crisis has thrown almost everything consumers know about energy out of the window. Home energy customers often feel like they have been left in the dark. At Power Compare, we exist to make switching easy. Whether you want to make the switch to a pre-payment meter tariff or a standard variable tariff, we can help.
Homeowners can compare tariff prices and suppliers through our comparison generator. You can find all the information you need to make an informed decision in under a minute. Once you have chosen a supplier or a tariff, we can handle the rest. Homeowners choose our switching service for a streamlined approach to home energy management.