Around four million households in the UK pay for their energy in advance using a prepaid meter, according to the energy regulator Ofgem. There are various types of pre-payment meters, including key meters, smart card meters and coin-operated meters - each of which accepts a different method of payment as part of a 'pay-as-you-go' system that requires users to pay for energy before using it.
For many households, the month ahead (April) marks the start of a higher rate being charged for users wishing to top up their meters. This has caused concern for people, especially as the cost of living continues to rise.
Financial expert Martin Lewis previously suggested that for those who can pay in advance, it might be wise to bulk buy energy at the cheaper rate before the hike goes up. However a range of suppliers have since come forward and said that they will claim the money back if they find customers have bought a bulk of energy in advance.
“If you don’t have a smart meter, the long term logic has always been that it is the price on the day that you top up that counts,” Martin said this week. He has called on the UK government to take action, saying people are facing a "fiscal punch in the face" due to the rise in costs.
Yet, several firms, including Scottish Power and EON, have already said that they will take the cash back from customers who bulk buy before the cap increase. However, you shouldn't panic ahead of the price hike as, according to Ofgem, energy suppliers won’t disconnect your gas or electric if you miss a payment right now. They are aware that "the Energy Price Cap rise that will apply from 1 April will be extremely worrying for many people".
As such, you should ask for ‘emergency credit’ if you use a prepay meter and can’t top up. Their rules mean suppliers must offer payment plans you can afford.
The website also recommend that you call your supplier if you are worried. Many have "agreed emergency measures with the government during the pandemic. Most have also signed up to fresh commitments drawn up with Ofgem and the industry trade body Energy UK to support you this winter."
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