Thousands set for compensation following prepayment meter review

Tens of thousands of energy customers across the UK are set to receive compensation after having prepayment meters installed without their consent.  

Some customers may also see their energy debts written off. 

Why are energy companies paying compensation? 

Energy companies are paying out more than £70m in compensation and financial support following a review by the energy regulator, Ofgem. 

This comes after some suppliers were found to have switched customers to prepayment meters without proper notice or agreement after they had fallen behind with their bills.  

In many cases, this was done either remotely through smart meters or by entering people’s homes to install new meters. 

Through their trade body, Energy UK, suppliers have acknowledged the issue and said they’ve worked hard to ‘put things right’. 

What is a prepayment meter? 

A prepayment meter, sometimes called pay-as-you-go, allows you to pay for your gas or electricity in advance, usually in smaller, more manageable amounts. 

If you have a smart meter, your supplier can switch it to prepay mode remotely. If you have an older-style credit meter, it can be replaced with a smart prepay version. 

How much could you receive? 

If you're eligible for compensation, the amount you receive will depend on how you were affected. Payments typically start at £40 and can rise to £250 or £500.  

In the most serious cases, where meters were installed inappropriately, some customers will receive up to £1,000. 

Ofgem has worked with energy suppliers to ensure that compensation is fair and reflects the impact on each customer. 

How will you get the compensation? 

If you're affected, you don’t need to do anything. Some customers have already been contacted by their supplier, while others will receive the money directly into their energy account. 

What if you’re struggling with energy bills? 

If you're finding it hard to keep up with your energy payments, you’re not alone and help is available.  

Speak to your supplier as soon as possible. They may be able to set up a payment plan that works for your situation or point you towards additional support. 

In January 2023, the government made it clear that energy suppliers must take all possible steps to help customers before moving them to prepayment, such as offering payment plans.  

Need more help?  

If you think your energy supplier is trying to switch you to a prepayment meter unfairly, or you want to understand your rights, have a read of our guide on what to do if your energy supplier is trying to move you to prepayment.   

For more information on steps to take if you’ve fallen behind with your gas and electricity bill payments, read our guide on what to do about energy arrears.