Business and Energy Secretary Grant Shapps has written to energy suppliers asking them to take every possible step to help customers in payment difficulties before moving them onto prepayment meters, it was reported on 23 January 2023. The government demanded that suppliers stop moving customers over to prepayment against their will, after some households were left without gas and electricity1.
The number of homes whose meters have been changed from standard to prepayment has risen sharply in recent months, and some people in vulnerable situations have been left without supply as a result. Moving a customer onto a prepayment meter required a court warrant, but courts are overwhelmed with applications and, according to the government, huge batches of disconnections have been approved in minutes. The government is calling on firms to share how many warrants they have applied for in recent months, which it says will reveal which firms are meeting their responsibilities and which are not1.
Ofgem said it will review whether companies have taken enough care over decisions to put customers onto prepayment plans. Its chief executive, Jonathan Brearley, said:
"If we find that they have not taken due care in this process, we will take further legal action against them."
Under Ofgem's rules, a forced prepayment meter should only be used as a last resort. Suppliers cannot move a household to prepayment if it is not safe or practical, including where someone is disabled or has a mental health condition that makes the meter hard to access, read or use; has an illness affecting breathing or made worse by cold; relies on medical equipment needing electricity; has a meter that is hard to reach or access; or would find it hard to reach a shop to top up. Suppliers must also have offered other ways to repay the debt, given at least 28 days to repay before saying they want to move the customer to prepay, and given at least seven working days' notice before installing a meter. They cannot move a customer who does not agree they owe money and has told them so, and a household cannot be moved to prepayment if it would not be able to top up the meter1.
The government has suggested suppliers offer additional credit, debt forgiveness or debt advice instead, and is working with Ofgem to check that the process for taking warrants to court is fair, transparent and supports vulnerable customers. Ofgem said it will look at its rules on when companies can apply for a court warrant and what steps they must take first. Some firms are already pausing remote switching of smart meters to prepayment mode, or giving some customers extra credit if they are struggling to pay1.
Why it matters for households
A prepayment meter changes how a home buys energy: supply depends on topping up in advance, and a household that cannot afford to top up can be left without gas or electricity, which the report describes as self-disconnecting1. That shifts the risk of a missed payment from the supplier's balance sheet onto the home, and it removes the ability to spread a bill across the year. For a household already in debt, the practical effect is that energy independence rests on having credit on the meter at all times rather than on a contract.
The rules described set the boundaries of what a supplier can do, and the protections for vulnerable customers turn on safety and practicality rather than on the size of the debt. The government's letter and Ofgem's review concern how those boundaries are enforced in practice, including through the courts. The report does not say how many households have been moved, how many warrants have been granted, or what proportion of applications involved vulnerable customers; those figures have not been reported1.
What happens next
The government has asked suppliers to share the number of prepayment meter warrants they have applied for in recent months. Ofgem said it will review whether companies took enough care and will examine its own rules on court warrants and the steps required beforehand. No deadline for either is given in the report1.