Since February 2024 the government has applied a discount on prepayment meters, meaning households may not be penalised financially for being forced to switch to one1. The measure is described in guidance on energy debt published by the comparison service Uswitch, which states that prepayment meters can be more expensive than a standard meter but that the discount offsets this1.
The same guidance sets out the debt thresholds that restrict switching supplier. A household on a credit meter cannot switch if it has been in debt for more than 28 days, while a household on a prepayment meter cannot switch if its debt is more than £5001. It also notes that a prepayment meter does not rule out debt: a meter can still be in arrears if there is not enough money on it to cover standing charges or emergency credit already used1.
On the scale of the problem, the guidance states that households across the UK collectively owe suppliers over half a billion pounds in domestic energy debt as of spring 2026, with each household in debt by around £1571. It describes this as comparatively low against the height of the energy crisis in spring 2022, when over a billion pounds was owed1. Defaults on direct debits were reported at record highs in April 20251.
The guidance also covers the protections that apply before supply can be cut off. A supplier must send a disconnection notice, cannot do so until at least 28 days after sending a bill, and must give at least seven days' written notice first1. Extra measures protect pensioners, people with long-term health problems, disabled people and those with serious financial problems1. Repayment plans can be weekly, fortnightly or monthly and include a portion of current use and a portion of the debt1. Some people on benefits can repay through small weekly deductions from benefit payments, known as third party deductions1.
"since February 2024, the government has applied a discount on prepayment meters that means you may not be penalised financially for being forced to switch"
The guidance also sets out the Warm Home Discount, an automatic rebate on energy used between October and March, set at £150 for the 2025-26 winter season1.
Why it matters for households
A prepayment meter changes how a home buys energy: it is topped up in advance, and if the money runs out the supply stops. That makes the standing charge and any emergency credit already drawn a continuing cost even when nothing is being used1. The discount applied since February 2024 is intended to remove the price penalty that previously came with being moved onto one1.
For a household's energy independence, the practical effect is that the meter type no longer automatically means paying more per unit than a credit meter customer, though the guidance does not give the size of the discount or how it is calculated. The £500 debt limit on switching means arrears can hold a prepayment household in place on its current tariff, while credit meter customers face a 28 day limit1. The rules on forced prepayment installation and on switching a smart meter to prepay without consent sit alongside these debt thresholds.
What happens next
The guidance does not set out any further dated steps. It notes that the Middle East conflict has already pushed energy prices up and that those prices are due to stay high for the rest of the year, which it says could lead to more people falling into energy debt1. No figure has been reported for the value of the prepayment discount or for when it might change.