You are here: Home - Household Bills - News -

Vulnerable prepayment meter users overpay £100 a year on energy

Written by:
Millions of people on prepayment meters are paying over the odds for their energy, equating to £389m a year.

More than four million prepayment meter customers are paying an average £94 more for their energy (£1,128) compared to those on a standard credit meter (£1,034).

These customers, including some of the most financially disadvantaged, also only have a choice of four fixed tariff deals, while standard credit meter households have a choice of 283 tariffs. Prepayment meter customers also only have the option of 45 variable tariffs compared to 91 for standard customers.

The research by revealed that two thirds (64%) of prepayment customers are on a standard variable tariff, with an average annual cost of £1,195. This is £39 more than a non-prepayment meter standard variable tariff

And when comparing a prepayment fixed tariff against a non-prepayment meter fixed tariff, these customers pay an average £33 more per year.

As well as greater annual savings for customers on a standard credit meter, these customers tend to switch to a better deal which means 32% of standard credit meter customers are on a typically more expensive SVT.

The annual difference in price between the average prepayment customer on an SVT versus a customer with a standard credit meter on a fixed term tariff is £219 per year. When compared to the cheapest fixed credit meter tariff on the market, the cost difference currently stands at £431 per year.

‘Prepayment meter customers offered poorer value deals’

Peter Earl, head of energy at, said: “It is hugely concerning that prepayment meter customers – some of whom are undoubtedly classed as vulnerable – are paying considerably more for their energy on average than those on a standard credit meter.

“According to the latest government fuel poverty statistics over two million households are living in fuel poverty. British Gas’ swift reversal of its decision to only allow top-up of its prepayment meters by a minimum of £5 earlier in the year underlines how far consumers struggling to make ends meet must make each pound go.

“A lack of competition in the prepayment meter market is likely a factor in these customers being offered poorer value deals in comparison to the majority of UK energy customers on standard credit meters. With limited options available, it would not be surprising if prepayment meter customers are deterred from switching supplier to secure a better deal. Encouragingly, many energy suppliers will remove a prepayment meter free of charge for a customer who wants to switch to a standard credit meter.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Average Brit goes 44 days without using cash

The UK has turned to contactless payments during lockdown with a fifth of people going two months or more without...