Energy debt on prepayment meters
|This page is for people who have debt on a prepayment meter. |
If you have debt on your credit meter, please see our Energy Debt on Credit Meters page.
What type of meter do I have?
|Prepayment meter||You pay for your energy before you use it. You might pay by topping up a card or key in a shop, online or using a phone app.|
|Credit meter||You pay for your energy after you use it. You might pay by direct debit, standing order or each time you receive a bill from your energy supplier.|
Why do I have debt on my prepayment meter?
If your home is supplied with gas or electricity you will have to pay a daily standing charge on top of the cost of the energy you use (a standing charge covers things like maintenance costs incurred by your energy supplier).
If you don’t top up your meter (for example, your gas over summer), this daily standing charge will start to build as a debt. When you top-up, some or all of the money you put on may be used up to pay off previous weeks’ unpaid daily standing charges.
Debt from a credit meter
If you previously had a credit meter and had debt on your account, your energy company may have transferred this debt onto your prepayment meter. It is likely that you will be making automatic repayments towards the debt each time you top up.
Debt from a previous resident
If you move into a property that has a prepayment meter and you haven’t told the supplier you have moved in, you may be paying off debt from a previous resident.
If you think this may be the case, get in contact with your supplier and tell them when you moved in; they will then be able to work out what the previous resident should have paid and will make sure that you are only paying the daily standing charge and for what you have used from the date you moved in.
How debt on your prepayment meter is repaid
If you have debt on your prepayment meter, your energy company will recover it either as a percentage of what you top up, as a fixed weekly amount, or both.
As a percentage of your top up
Sometimes debt repayments are taken as a percentage of the amount you top up. For example, if the debt repayment is set at 30%, every time you top up £10 then £3 would go towards your debt and £7 would be added as credit.
As a fixed weekly amount
Sometimes a fixed amount is taken out of the amount you top up. For example, if your debt repayment is set at £6 a week, and you top up £10 a week, then £6 goes towards your debt and £4 is added as credit. If you don’t top up for a few weeks, all the missed payments of £6 (or whatever the agreed amount is) will be added up and deducted from the next top up you make.
Both as a percentage and a fixed weekly amount
It is possible to have your meter set up so that debts are being paid by both a percentage and a fixed weekly amount. It is not always clear from looking at your meter that this is happening. You will be paying two lots of debt repayment and only a small amount of your top-up money will credit your meter.
How to manage your prepayment debt
Contact your energy company to find out if you have any debt on your prepayment meter. They may be able to tell you, or they may give you instructions to find out through your meter. If you are in debt, find out if you are repaying the debt as a percentage, a fixed weekly amount or both.
If the fixed weekly amount is not affordable, ask for the amount to be reduced. Some companies have a set minimum amount, and others will work out your repayments depending on how much you owe in total.
If you are paying back via a percentage or both a percentage and a fixed weekly amount, ask to pay an affordable fixed weekly amount instead.
If your energy supplier can’t reduce your repayments to an affordable amount ask what the next stage in the process is. They may ask you to get debt advice, or to speak to their own money advice service.
If any of the following apply to you, we recommend you seek professional debt advice:
- You have a large debt.
- You also have other debts.
- You can’t afford a repayment plan.
- You’re being threatened with enforcement action.
You can get professional debt advice from these organisations:
Ask your energy company if they know of a trust fund you can apply to to have your debt reduced. Some companies have their own, others refer to the British Gas Energy Trust.
They will want evidence of your income and expenditure, proof that you have set up the repayment plan and made three months’ worth of payments, and for you to complete an application form. Sometimes it is possible to get some or all of your debt cleared.
Error with your prepayment meter?
If you think there’s an issue with your prepayment meter, contact your supplier. They will confirm if there is a problem and should offer a solution by fixing it remotely or replacing it with a new one.
If you are not happy with the service they offer or their resolution of the issue, you can raise a complaint with them.