Ofgem announced on 28 May 2025 that energy suppliers that did not follow the rules when installing prepayment meters to collect debt without household permission will pay £18.6 million in compensation and debt write off to at least 40,000 customers1. The payments cover installations made during the assessment period 1 January 2022 to 31 January 20231.
Ofgem said suppliers will pay £5.6 million in compensation to 40,000 customers who had a prepayment meter installed without permission during that period, and will write off a further £13 million of debt from the same group1. The regulator said this sits on top of £55 million of financial support already provided directly to affected consumers by suppliers before the review was completed, in the form of hardship payments and debt write-off1.
The regulator has issued guidelines setting compensation levels according to the detriment suffered1:
| Detriment | Compensation level |
|---|---|
| Process misalignment, data quality and record keeping | Goodwill payments of £40 to £60, paid on a case by case basis |
| Insufficient debt support | £250 |
| Unfair customer treatment | £250 |
| Vulnerability not considered | £500 |
| Inappropriate installation, switch or use of prepayment meter | £1,000 |
Ofgem said: "If you are entitled to compensation, you do not need to do anything. You will be contacted by your energy supplier."1
The regulator asked suppliers in 2023 to pause installing prepayment meters without a household's permission, and has since been checking past installations under a review it calls the Market Compliance review1. It said it has strengthened the rules covering installation without permission, and that it continues to check supplier compliance1. The announcement follows investigations into British Gas and Utilita Energy, both listed as related links on the Ofgem page1.
Citizens Advice has told consumers in England and Wales that a supplier might owe compensation where it installed a prepayment meter in the home or switched a customer over to prepayment remotely between 1 January 2022 and 31 January 2023, and that the supplier should send a letter telling them if they will get compensation2. The charity said it will update its pages with more information when it can2.
Why it matters for households
For a household moved onto prepayment without consent, the meter changes how energy is paid for: credit is bought in advance, and running out means supply can stop until a top-up is made. Debt is recovered through the meter, so part of each top-up goes to arrears rather than to energy. Citizens Advice gives the example that a £10 top-up might see £5 go to debt repayment, leaving £5 of credit2.
That structure is why the write-off element matters as much as the cash. Removing £13 million of debt from these meters reduces what is deducted from future top-ups, while the compensation payments are one-off sums. The £55 million already provided in hardship payments and debt write-off was delivered before the review concluded1.
The rules on when a supplier may install a prepayment meter without permission, and the protections for vulnerable customers, sit alongside this compensation exercise. Households that believe they were affected can check the position on forced prepayment meter rules and on switching a smart meter to prepay without consent. Where a meter was installed without permission, the route for redress runs through the supplier first, and then the complaints process covered in energy complaints and redress.
What happens next
Ofgem has not set out a timetable for when individual payments will be made, and has not named the suppliers involved or the amounts each will pay; that has not been reported1. Affected customers are to be contacted by their supplier rather than applying1. Citizens Advice said it will update its guidance when more information is available2.
Sources3 cited
- Compensation for installing prepayment meters without permission | Ofgem, ofgem.gov.uk
- You can't afford to top up your prepayment meter - Citizens Advice, citizensadvice.org.uk
- You can't afford to top up your prepayment meter - Citizens Advice, citizensadvice.org.uk