Gas and electricity bills for around 22 million households across the UK are set to rise by £693 from April 1 in-line with Ofgem’s 54 per cent increase to the energy price cap.
The upcoming increase means the average household energy bill will rocket to around £1,791 per year while homes on prepayment meters will see costs go up by £708 to £2,017 - and they are expected to go up again when Ofgem reviews the price cap in August, with the change coming into effect in October.
However, Martin Lewis and his team at MoneySavingExpert.com have shared a completely legal way for those using an older prepayment meter, which still uses a card or a key to top-up, to delay the price cap and ‘stockpile’ energy by the end of March.
In a video shared on his social media channels, the consumer champion said: “For those using prepayment meters, specifically non-smart prepay meters - if you run a smart prepay this won’t help - the regulator Ofgem has confirmed to me that you get the rate on the day you top up, not when you use energy.
“That means if you max out your top-up in March before the rate goes up, that’s what you’ll get, even if you then use that energy in April.”
Martin added: “You can then extend the cheap rate for longer by maxing your top-up if you can afford it - and I know not everybody on prepay can.”
He went on to say how every mainstream has confirmed that this will work, except Scottish Power, who have said they will “add a rate on top of that” which the financial journalist said seemed to be “at odds” with what the energy regulator is saying.
Martin has reported Scottish Power to Ofgem to “try and see if there is a way round that”.
How exactly does it work and how much can I top up?
MoneySavingExpert.com explains: “When a price change happens, for those with older prepayment meters, the information about the new rates is sent to the terminals where you top up your key or card. This is transferred to the card when you top it up, then to your meter when you next plug it in.”
Essentially, this means you will only start being charged the new rates once you top up after April 1.
So you could potentially put as much credit on your meter as you can, and then use that for as long as possible - allowing you to use energy at the current rates and delaying having to pay the much higher rates under the price cap.
However, there is a limit on how much you can top up a card or key each time, and how much credit your meter can hold.
Most people can typically top up a key or card between £1 and £49 at a time.
Prepay meter limits vary for each supplier, however, generally, these can hold up to £249 for electricity and £999+ for gas - it just depends on the ,eter and your supplier. Check your suppler’s website or contact them to find out exactly how much.
For example:
- Bulb prepay electricity meters can hold up to a total of £255, as can the electricity key. This means at any one time you can have a maximum of £510 on your meter and key. Gas meters have no limit, so you can top up as much as you like.
- EDF Energy prepay electricity meters can hold up to £249. Gas meters hold up to £999.
What to do if you are struggling to pay your energy bills?
Contact your energy supplier straight away and explain the situation, under the regulatory guide they are obliged to help customers find a way to pay.
You can also seek advice from non-profit debt and advice services including Citizens Advice Scotland, StepChange and Christians Against Poverty.
Martin Lewis is hosting a special hour-long cost of living crisis edition of his Money Show Live on Tuesday night at 8pm on STV/ITV.
To keep up to date with the energy crisis join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.
