Just what is the problem with prepayment meters?
An estimated 4 million people around the UK are currently using prepayment energy meters. These meters are back in the news for all the wrong reasons.
Some energy firms have been accused of rushing to seek warrants to enter people’s houses to install these meters – which is outrageous given the current energy crisis.
Regulator Ofgem is going to be investigating this situation I’m pleased to say. So what’s the problem with prepayment meters? Here’s my guide.
What is a prepayment meter?
With a prepayment meter, you pay for gas and/or electricity in advance, usually through a USB style ‘key’ or a card. You top up the key or card with credit at a paypoint and insert it in to the meter to ‘load’ it with the credit.
What are the main problems?
The main problem with prepayment is when you run out of credit, your supply cuts out. You will usually have a small amount of emergency credit to get you through a short timeframe, but when money is tight, people tend to use this emergency credit regularly instead.
Inconvenience is the other major issue, as you have to load up your card or key with credit. PayPoint and Payzone outlets are available at thousands of places around the UK, but if your local shop is closed then things can spiral out of control quickly.
I’ve also heard from lots of readers who have problems with cards or keys that aren’t loading the credit, too.
If you are out of credit, things get complicated.
You’ll need to contact the energy provider to see if they can give you temporary credit, which they can upload to the meter remotely. Now you are in debt, and you’ll have to pay some of that debt back every time you top up the meter.
So if you have the same amount of money coming in each week or month, you’ll have less to spend in real terms on energy because of reducing that debt.
What happens if I keep running out of credit?
If you are continually in debt then the energy firm’s debt management procedures should kick in. If you are classified as vulnerable, then they should have identified this – but as recent news reports have shown, the system does fail far too often. Citizens Advice has a great guide for people on prepayment meters. Just type ‘prepayment meter help’ and Citizens Advice in to a search engine.
It was reported earlier this month that 3.2 million people were effectively cut off (albeit temporarily) due to running out of energy credit last year.
How do I ditch a prepayment meter?
The good news is you can switch from a prepayment to a standard meter for free. The bad news is there’s sometimes a backlog of requests, available meters and engineers to do the work.
The push to get the nation on to smart meters may have been scaled back but it is still under way, which has contributed to the wait to get the meter changed.
What help is there if you are struggling?
There is a complicated series of benefits, grants and other support available for people who are older, vulnerable or in financial difficulties. Again, if you type ‘financial difficulties’ and ‘Ofgem’ in to a search engine you’ll get the full list of help and support.
If you are in financial difficulties Ofgem says that you can ask for the following: A review of your payments and debt repayments; payment breaks or reductions; more time to pay; access to hardship funds; advice on how to use less energy; the option to go on the Priority Services Register – a free support service.