What is a smart prepayment meter?

• What is a smart meter and a smart prepayment meter?
• What is a prepayment meter and how to use a prepayment meter?
• How do prepayment smart meters work?
• What are the advantages of smart prepay?
• Do prepay customers pay more for their electricity and gas?
• Can your meter be switched to prepay mode without your consent?
• How to save money with a smart meter in prepay mode
• Help for those worried about the rising costs of energy

A smart meter is the next generation of a gas and electricity meter. They are being installed in homes across Great Britain at no extra cost to you, to replace the traditional meters, including prepay key meters, many of us currently have ticking away under the stairs, or outside our homes.

Smart meters measure how much gas and electricity you’re using, as well as what it’s costing you and display this on a handy in-home display.

Smart meters can also work in prepayment mode. They measure your energy usage and send your usage information securely to your energy supplier. The in-home display allows you to see how much energy you’re using and your available credit. That means no more hunting for your meter under the stairs or outside when you need to check your balance or top-up.

A prepayment meter, or key meter, works on a “pay-as-you-go” system. You top up your meter with credit – usually using a smart card, key, or through an app – and that credit is used as you consume energy. When the credit runs low, you need to top up again to keep your gas or electricity supply running.

And what is a 'pay-as-you-go' smart meter?

A ‘pay-as-you-go smart meter’ and ‘prepayment smart meter’ are the same thing – they are both ways of describing a smart meter in prepayment mode. 

Easier top-ups

A prepayment smart meter lets you see exactly how much credit you have left on your in-home display. When it's time to top up, you can do it quickly and easily online, through an app, by phone, or even by text – depending on your supplier – saving you time and hassle. And if you prefer, you can still top up in person at a shop.

Historically, all prepay customers, including smart prepay customers, have paid more for their electricity and gas than direct debit customers. This is because energy suppliers have higher costs to service prepay customers (from collecting payments to issuing vouchers).

But in the 2023 the government scrapped the unfair charge on prepay customers, meaning they will no longer pay more on average for their energy than direct debit customers.

The rules around how and why customers with either smart or analogue meters can be switched from credit to prepay are very carefully controlled by Ofgem, the energy regulator for Great Britain. This switch should only occur as a last resort, and where it is safe to do so. You can find out more about the regulations regarding energy meter switching on the Ofgem website.

If you already have smart prepay, find out how you could use it to help save you money below.

If you are worried about the rising cost of energy and being able to pay your energy bills, we have information on support and help below which may be available.

For information about smart meters in prepay mode in other formats and languages, see our guide to smart prepayment meters on our Resource Centre and choose from the available languages and accessible formats.