Avoid Overcharging With Prepayment Meters
The prepayment meter, also known as a pay as you go meter, is associated with the highest fuel tariffs for both gas and electricity. While it may have its place for providing a strict financial structure to a household’s budget, Ofgem have stated that bills for this type of meter are £95 higher annually than other meters.
Prepayment meters allow the same payment plan as a pay as you go mobile phones. Pay upfront for the fuel to be used and only pay what you can afford. The 5 million meters in the UK are subject to the highest tariffs and households cannot benefit from discounted online tariffs or reductions for paying by direct debit.
Another sting in the tail is that the older prepayment meters require to be manually adjusted when the fuel tariff changes. If the energy supplier engineer is slow in changing the meter or misses an appointment this will lead to back billing – a bill through the letterbox demanding money for the period the tariff was incorrect. A kick in the teeth for an supposedly advance payment meter.
To avoid the disadvantages of a prepayment meter, first of all avoid changing to this meter if the standard tariff is currently in place. If the prepayment meter is already in place then see what tariff other energy suppliers are offering – this could save up to £100 a year.
There is something called a social tariff. Energy suppliers will offer a reduced rate if the household in in fuel poverty (spending over 10% of income on fuel), or the occupier is aged or on income support. Social tariffs differ greatly so ask the question to determine what is available.
It is possible to have the prepayment meter replaced to allow the household to move onto a standard tariff. But expect costs to mount up for this. Cost of a new meter, cost of the engineer to fit it, and even a security deposit to ensure debts do not begin to be run up – as the household on the new standard tariff will be untrusted.
Lastly, a bit off-centre, but ensure enough money is in the meter before you go on holiday to cover the appliances that run continuously – fridges, alarms, warm water fish tanks. Flooding due to a defrosted freezer is not a desired expense when returning home.