| By Chandraketu Tripathi | Updated April 2026 | ||||||||||||||||||||
| Around 7 million UK homes have prepayment meters — also called pay-as-you-go (PAYG) meters — for gas, electricity or both. You pay for energy before you use it by topping up a key, card or app. Once the credit runs out, the supply stops. Here is how they work, what they cost compared to credit meters, and your rights around switching in 2026. | ||||||||||||||||||||
Key facts April 2026 Prepayment meters in UK: ~7 million homes | Prepayment premium vs credit: now equalised under Ofgem rules | Emergency credit: typically £5–£10 | Right to switch: yes, in most cases | Smart PPM: can top up by app; no key needed | ||||||||||||||||||||
How Prepayment Meters Work | ||||||||||||||||||||
| A prepayment meter measures your energy use in real time and deducts credit as you consume. When credit reaches zero, the supply cuts off — except for emergency credit (a small reserve that kicks in automatically). You top up credit at: | ||||||||||||||||||||
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Prepayment Meter Costs vs Credit Meter 2026 | ||||||||||||||||||||
| Historically, prepayment meter customers paid significantly more per unit than those on standard credit meters. Since February 2023, Ofgem has required suppliers to equalise prepayment and credit meter rates within the price cap. As of April 2026: | ||||||||||||||||||||
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| Pre-2023 vs now: Before February 2023, prepayment meter customers paid on average £235 more per year than credit meter customers for the same usage. Ofgem’s rule change eliminated this premium. If you are still being charged more, contact your supplier or Ofgem. | ||||||||||||||||||||
Emergency Credit: What It Is and When It Kicks In | ||||||||||||||||||||
| Emergency credit is a small amount of additional credit that activates automatically when your prepayment meter runs out during certain periods — typically overnight, on weekends, or on bank holidays when top-up shops may be closed. Key facts: | ||||||||||||||||||||
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Debt Settings on Prepayment Meters | ||||||||||||||||||||
| If you owed money to your previous energy supplier or ran up a debt while on a credit meter before being moved to prepayment, your meter may have a debt repayment setting built in. This means a fixed amount is automatically deducted from each top-up before it goes toward energy. Ofgem rules state: | ||||||||||||||||||||
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Can You Switch from a Prepayment Meter to a Credit Meter? | ||||||||||||||||||||
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Smart Prepayment Meters: The Future | ||||||||||||||||||||
| Smart prepayment meters work exactly like standard smart meters but in prepayment mode. Benefits over traditional PPM: | ||||||||||||||||||||
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Key facts April 2026 Prepayment meters are now priced at the same rates as credit meters under Ofgem rules. Emergency credit typically provides £5–10 of backup supply. If you have debt on your meter, the maximum deduction rate is 40p/day. You have the right to switch to a credit meter in most circumstances. Smart prepayment meters allow app top-ups and remote switching between modes. | ||||||||||||||||||||
Frequently Asked QuestionsAre prepayment meters more expensive than credit meters UK 2026? No — since February 2023, Ofgem has required suppliers to charge the same rates to prepayment meter customers as credit meter customers within the price cap. Previously, PPM customers paid up to £235 more per year. Can I switch from a prepayment meter to a credit meter? Yes, in most cases. If you have no debt on the meter, your supplier must allow you to switch. With a smart prepayment meter, the switch can be done remotely. Clear any outstanding debt first if there is one. What happens when a prepayment meter runs out? Emergency credit activates automatically — typically £5–10 depending on your supplier. This must be repaid on your next top-up. Smart meters allow top-up by app at any time; traditional meters need a Paypoint or Payzone visit. What is the maximum debt deduction on a prepayment meter? Ofgem rules cap debt deductions at 40p per day or 40% of each top-up, whichever is lower. If this rate causes hardship, contact your supplier to negotiate a lower repayment rate. | ||||||||||||||||||||
| Related Guides | ||||||||||||||||||||
| Sources: Ofgem prepayment meter rules 2023, Ofgem price cap Q2 2026, Citizens Advice PPM guidance, Energy UK supplier data 2026. April 2026. |
Prepayment Meters UK 2026: How They Work, Costs and Can You Switch to Credit?
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