What Are Prepayment Energy Meters?

Prepayment meters (prepaid meters) allow you to pay for your energy before you use it, as opposed to paying a monthly or quarterly bill. This setup is sometimes preferred by people who want more control over their energy spending. Customers simply go to their local pay point (usually a local shop) and load an amount of their choosing onto a card or key. However, with a modern, smart prepayment meter, you can top up your credit via an app on your smartphone for added convenience.

When the balance runs low, you simply add more credit, allowing you to keep track of your energy spending instead of waiting for the next bill. They are also a good option for anyone who is repaying energy debt, but you must keep an eye on your credit balance to make sure it doesn't run out.

How Prepayment Meters Work

A prepaid meter is essentially pay-as-you-go energy, allowing you to top up whenever your credit balance runs low, so you only use energy you have already paid for. If your property has a traditional prepayment meter, your energy provider will send you a card or key that you will take to a local pay point to load credit onto. Then you insert it into your meter, and the credit is loaded onto it, ready to be used. However, modern smart prepayment meters allow you to load credit via an app, instead of having to visit your local shop. Some smart meters also let you reallocate credit between gas and electricity, giving you even more control. Your remaining credit balance will be visible on the meter's display screen, but remember, you will still need to cover daily standing charges, so your credit will deplete even if you are not using any energy, like when you're on holiday, for example.

Prepayment Meter Tariff Exit Fees

If you have a prepayment energy meter, it's important to understand whether any exit fees apply before changing tariffs or switching supplier. While many prepayment tariffs don't include exit charges, other fixed-term prepayment deals may require you to pay a fee if you leave before your contract ends.

If you're on a variable prepayment tariff, you can usually switch to another supplier without paying an exit fee. However, if you've agreed to a fixed-price prepayment tariff, it's worth checking your terms and conditions before making the move.

Most suppliers also allow customers to switch without paying an exit fee during the final 49 days of a fixed-term contract. This gives you the opportunity to compare prepayment energy deals and arrange your switch before your current tariff expires.

Do Prepayment Energy Tariffs Have Exit Fees?

Exit fees vary depending on your supplier and the tariff you're on. Some suppliers don't charge exit fees on prepayment tariffs, while others may apply a fee for each fuel if you switch before your contract ends.

Before switching your prepayment energy supplier, check:

• Whether your current prepayment tariff includes an exit fee
• How much you'll be charged if you leave early
• Whether you're within the final 49 days of your contract, when exit fees may no longer apply

Should You Switch If There's an Exit Fee?

Paying an exit fee doesn't always mean you should stay with your current supplier. If switching to a cheaper prepayment energy tariff could save you more than the cost of leaving your existing deal, changing supplier may still be worthwhile. Comparing the latest prepayment energy prices can help you work out whether switching now could reduce your energy costs and provide better value over the long term.

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