Most of us don’t really spend much time thinking about our energy bills – it’s just something else we need to fork out for. But when you’ve got a prepayment meter, the amount you spend on heating and lighting your home, is usually all too noticeable. So, you might be warmed by the news that energy regulator, Ofgem, has introduced caps on how much you pay for your electricity and gas – saving you on average around £80 a year.
The cap isn’t forever and only applies up to 2020 – by which point we should all have smart meters to keep track of how much we spend. But until then, it’ll stay in place and will be reviewed twice a year by Ofgem. There are different caps depending on where you live and what sort of meter you have, and your provider is responsible for making sure their charges to prepayment customers don’t go over the level of the cap.
It’s an attempt to make the energy market fairer – at the moment around four million homes have a prepayment meter, which is basically an energy supplier’s version of a pay as you go phone. Customers buy their gas or electricity by topping up a meter with coins, tokens or online – and one of its main benefits is that you only pay for what you use. But the cloud to that silver lining is that the prepayment energy market isn’t as competitive and tariffs can be expensive.
So, unless you’re a glutton for punishment and enjoy paying over the odds for your energy, why would you have a prepayment meter anyway? Well, they’re a favourite in rental properties to prevent tenants from doing a moonlight flit, leaving landlords stuck with unpaid bills; plus, it saves the hassle of changing account names and details every time someone moves in or out.
You may also find yourself with a prepayment meter if you’ve not been great at money management in the past and have struggled to keep up with bills. Of course – the irony in this case is that you could be paying more than if you didn’t have a prepayment meter! Number crunchers have calculated that customers on prepayment meters paid £220** more (on average) than households who were on the best direct debit deals. With that in mind, that £80 saving might suddenly seem a bit underwhelming.
But there are ways and means of saving even more money off your energy bills – and we’re not talking about wearing more layers and bubble-wrapping the window ledges – you can simply switch and save. Switching energy supplier is easy and with the Energy Switch Guarantee you’re...well…guaranteed that it’ll all go to plan and you won’t need to invest in candles for fear of it all going horribly wrong. Our own research has found that only 17% of households actually switch, but we’ve saved our customers £87 million over 2016**. So, if you want a bit more than a few extra quid in your pocket – be brave and make the change – start comparing now.