Households on prepayment meters began paying lower standing charges than households using other payment methods from 1 October 2023, according to the Welsh Government's Tackling Fuel Poverty priority actions update published on 23 June 20251. The change applies to standing charges, the fixed daily amount added to a bill regardless of how much energy is used, and is separate from the unit rate charged for each kilowatt hour.
The Welsh Government described the change as "a welcome first step" in its account of work to reduce reliance on prepayment meters as a way of recovering arrears1. The same update records that Ofgem confirmed in September 2023 that its Code of Practice for the involuntary installation of prepayment meters would be written into mandatory supply licence conditions, and that this took effect on 8 November 20231. The update states that the temporary ban on involuntary prepayment meter installation in 2023, together with the Code of Practice, has reduced the over reliance on prepayment meters for arrears recovery1.
"Since 1 October 2023, households on prepayment meters have been paying lower standing charges than those on other payment methods, which is a welcome first step."
The update does not give the level of the prepayment standing charge, the size of the difference against other payment methods, or the number of households affected. Those figures have not been reported in this document1. The document also does not set out how the lower prepayment standing charge interacts with unit rates under the price cap, so whether a prepayment household pays more or less in total than a direct debit household is not stated there1.
The Welsh Government's wider fuel poverty programme is delivered through the Warm Homes Nest scheme, launched on 1 April 2024 and described as a seven year scheme1. Reported figures for the earlier Nest scheme include £39.3 million invested in 2023 to 2024, 4,816 homes improved, free energy savings advice to 12,809 households and a modelled average bill saving of £595 per year1. For 2022 to 2023 the figures were £26.9 million, 4,364 homes, 21,959 advice contacts and a modelled £422 per year, and for 2021 to 2022, £24.5 million, 5,127 homes, 15,777 advice contacts and a modelled £300 per year1. Since 2011 the Welsh Government states it has invested more than £251 million through Nest, helping more than 82,000 lower income households with installed measures and more than 210,800 with advice1.
Why it matters for households
A standing charge is charged every day whether or not a home uses any gas or electricity, so it falls hardest on low-use households, including those that ration energy. For a prepayment household, a lower standing charge reduces the fixed amount that has to be covered before any energy is used, which matters where credit is topped up in small amounts and can run out. The change does not alter the unit rate a household pays, so the effect on a total bill depends on how much energy is used. Prepayment customers also face the practical constraints of topping up and emergency credit, and the terms on which a supplier will move a household to credit payment differ between suppliers.
What happens next
The Welsh Government states it is developing updated fuel poverty estimates relating to October 2024 and anticipates publishing them early in the autumn, with interim targets based on EPC ratings to follow after input from the Fuel Poverty Advisory Panel1. It also states it will work with the panel to review the Cold Weather Resilience Plan ahead of next winter, and that a crisis route currently runs until March 2026 and will be reviewed annually1. The update records that two original actions were closed, eight extended and six new short term actions added1.