The February 2024 price cap announcement applied a discount to prepayment standing charges, according to Uswitch, which reports that the change makes prepayment slightly cheaper than standard credit1. The same account states that prepayment bills overall will be comparable to or slightly cheaper than Direct Debit bills2.
Prepayment meter tariffs were traditionally more expensive than standard credit meters, a gap that led to accusations of a "prepayment premium"1. Uswitch states that as of April 2024 those on prepayment meters pay slightly less for their energy than those on credit meters, and that this could be the case for months if not years1. Prepayment tariffs remain subject to the price cap in the same way standard variable credit tariffs are2.
"As part of the February 2024 price cap announcement, the government is applying a discount on prepayment standing charges, which means that prepayment will be slightly cheaper than standard credit."
For the July to September 2026 price cap, Uswitch gives the following prepayment unit rates and standing charges2:
| Electricity | Gas | |
|---|---|---|
| Unit rate | 25.32p per kWh | 7.07p per kWh |
| Standing charge | 57.19p per day | 29.04p per day |
The prepayment price cap level is given as £1,620 for 1 July to 30 September, rising to £1,678 for 1 October to 31 December2. Uswitch notes this is an indication for average use households only: those who use more pay more, and those who use less pay less2.
The two Uswitch pages differ on the number of prepayment meters in use. One states there are around four million prepayment energy meters in the UK1. The other states that as of 2026 around eight million people in the UK have a prepayment energy meter, according to Ofgem2. The first figure counts meters and the second counts people, and no single figure covering both is given.
Why it matters for households
A standing charge is a fixed daily amount paid regardless of how much energy is used, so a discount applied to it lowers the floor cost of having a supply. For a household on prepayment, that changes the arithmetic of the meter itself: the payment method that once carried a premium now sits at or slightly below standard credit and Direct Debit on the figures given1. Prepayment also removes the risk of a large catch-up bill, because energy is paid for before use, though it brings its own constraints, including limited access to the cheapest deals on the market and the need to top up2. Where a home cannot reach a shop to top up, supply can be switched off temporarily2. Emergency credit is available on most prepayment meters but is limited2.
What happens next
Uswitch states that prepayment meters are being phased out by the smart meter initiative, which aims to offer a smart meter to every home by June 2025, and that this will make topping up easier1. The same page states separately that there is no suggestion that prepayment meters will be phased out1. No further dated steps on the standing charge discount itself are given.