Last updated: 11 November 2020
You’re probably familiar with a standard credit meter, where you pay for your energy use on a monthly or quarterly basis. By contrast, gas and electric prepayment meters operate with a pay-as-you-go tariff, requiring you to pay in advance. You’ll need to top up your funds with a smart card or key fob inserted into the meter.
Whether you’ve moved into a new home with a prepayment meter or are simply on the hunt for a more competitive tariff, here’s how to make the switch to a standard meter.
Energy regulator Ofgem introduced a price cap in April 2017 for prepayment meter plans. It’s reviewed twice a year to define a maximum amount that energy suppliers can charge, depending on location and typical use in your area. There’s some variation between suppliers up to the price cap value, giving you a little wiggle room for a better deal if you compare rates.
Yet while rates differ between suppliers, the bottom line is that gas and electricity prepayment meters tend not to be as competitively priced as standard credit plans. When you pay for your energy on a monthly or quarterly basis, you’ll benefit from lower prices and wider options. This means you’re far more likely to save money in the long run when you change from a prepayment meter to a standard meter.
There’s also the matter of convenience. On a standard gas or electricity meter plan, you can pay by direct debit rather than running to the shops to top up a key fob, which can be a dealbreaker for some customers.
If you’ve moved into a new home with gas and electric prepayment meters, it’s easy to make the switch by contacting the current supplier. If you’re renting, you can also change to a standard meter, but you’ll be liable for any associated fees. You might also need to switch back to the prepayment meter when you move out, at the risk of losing your deposit.
The big six energy suppliers will switch prepayment meters for standard meters at no cost, but there may be some conditions attached. For example, if there are any outstanding payments or debts attached to the account, these will need to be paid upfront before they’ll make the switch for you.
If your credit history isn’t ideal, an alternative would be to pay a deposit to the supplier. This will usually be equivalent to the cost of energy over a three-month period, typically between £150 and £300 depending on your household’s size and location.
Smaller energy suppliers may charge a fee to remove the old meter and install a new one, but it’s well worth it overall when you save money over time on your energy bills. If your supplier tries to charge you, think about switching to a new one who will install a standard meter for free. Sometimes just telling your current supplier that you’re planning to switch is enough to make them waive the fee.
Ready to trade up to a credit meter? The first step is to get in touch with your energy supplier to find out if you’re eligible. In most cases, this will involve a credit check to determine whether you’ll be able to keep on top of a repayment schedule.
After passing the credit check and any other relevant eligibility requirements, the supplier will send round an engineer to remove your prepayment meter and replace it with a new credit meter. The timeframe for this will depend on your location, but generally shouldn’t take more than a couple of weeks.
Each of the big six energy suppliers in the UK has its own rules in place when it comes to changing a prepayment meter to a credit meter. Here’s a quick list of energy suppliers and what they require.
If you’ve passed the credit check and are free from any outstanding debts, British Gas makes it easy to change from a prepayment meter to a standard meter. They’ll take away your prepayment meter and install a credit meter for free.
EDF has a similar policy, replacing your prepayment meter with a credit meter for free provided you’ve paid back any money you owe. The full process can take a few weeks, so it’s best to arrange this straight away if you’ve just moved into a new home with a prepayment meter.
Like others on the list of energy suppliers, E.ON will make the switch without any fees so long as your account’s free from debt and you’ve passed the credit check.
npower’s policy is to replace your meter free of charge within 10 days if you have a good credit history or are an existing customer with a record of paying bills on time. New customers might need to pay a security deposit of up to £250 or complete 12 months of on-time payments first. If you’re a tenant, you might also need to get landlord approval.
Like npower, ScottishPower sometimes asks new customers to pay a security deposit up to £150 per fuel before it will switch from a prepayment meter to a standard meter. Don’t worry though, this is refunded after you’ve paid your bills on time for a year.
SSE’s policy is hassle-free and straightforward. Like other energy suppliers in the UK, it simply requires a credit check, after which it will replace your prepayment meter for free.
As you can see, most energy suppliers will require that you either have a history of good credit or on-time payments before they’ll install a credit meter. There are a few other circumstances in which the supplier will replace your prepayment meter even if you’re in debt.
If your personal situation means that it’s not safe or practical to use a prepayment meter, the supplier should replace it with a standard one. For example, you might need a reliable supply of electricity for medical equipment like a dialysis machine or your health might make it difficult for you to top up your prepayment meter.
In cases like these where it’s not safe or practical, the energy supplier should work with you to see if there are any solutions. They might replace your prepayment meter with a smart meter that allows you to top up your account online; or install a standard meter without charge.
If you’re unable to meet the eligibility requirements for a standard credit meter, you can still shop around for the best prepayment energy plan. It’s worth comparing tariffs from different suppliers to find the best deal. Some suppliers offer additional benefits beyond the price, like being able to top up your meter via smartphone. In the meantime, you can work on improving your credit rating to make the switch later.
Is your credit score in need of a little boost? You’ll find it easier to get rid of your prepayment meter if your credit’s up to par, so here a few quick steps to take.
Check your report for errors
Knowledge is power, so give your credit report a quick once-over to make sure there aren’t any mistakes on file. This also gives you the chance to check for fraudulent activity, like credit taken out in your name. If something doesn’t look right, contact the credit reference agency straight away.
Get rid of old credit accounts
Once you’ve paid off an old credit card, close the account. It looks better to have a few active accounts than a sky-high credit limit due to old accounts.
Register on the electoral roll
This is one of the easiest steps to take to boost your credit, and you can even do it online. The electoral register officially ties you to your current address, making you less of a fraud risk to lenders.
Be patient before applying again
If your energy supplier has already told you that you don’t qualify for a standard meter due to your credit, give it a few months before you reapply while you work on improving your credit score. Credit reports show all your applications and having too many in a short timeframe is a warning sign for lenders.
You’ve passed the credit check, compared energy plans and negotiated a free standard meter installation. Don’t forget to check how much credit you have remaining on your prepayment meter on installation day. You’ll need to make sure your supplier transfers this credit to the new account – it’s money you’ve paid, after all. On the other hand, you may still owe money to the supplier, in which case you can expect this amount to be added to your first bill.