Glossary · UK
What is Prepayment Meter?
A gas or electricity meter that requires credit to be topped up in advance, either via a physical key/card or a smart meter app.
Full Definition
A prepayment meter is a gas or electricity meter that requires the customer to pay for energy in advance, topping up credit via a key, card, mobile app or smart meter, rather than being billed in arrears like a standard credit meter. Historically, customers on prepayment meters -- often tenants, people with a poor credit history, or those installed under a warrant after falling into debt -- have tended to pay more per unit than customers on direct debit tariffs, though Ofgem's price cap now sets a maximum unit rate and standing charge specifically for prepayment customers, narrowing (though not always eliminating) the historic premium. If credit runs out, supply can be interrupted unless the meter has an emergency credit facility or, for smart prepayment meters, a "friendly hours" or self-disconnection prevention feature; suppliers are subject to strict rules around involuntary switching to prepayment (including forced installation under warrant) for vulnerable customers, following tightened Ofgem guidance after well-publicised cases of forced prepayment installation causing harm. Support schemes such as the Warm Home Discount and various hardship funds can sometimes be applied directly as credit to a prepayment meter, and customers struggling to top up should contact their supplier, since suppliers have obligations to offer support such as payment plans, debt relief and referrals to charitable funds before pursuing disconnection.