Citizens Advice published a discussion paper on the future of prepayment on 25 June 2026, setting out the challenges of supporting prepayment customers, persistent self-disconnection and whether existing safeguards give firms clear guardrails1.
The charity said prepayment has changed substantially since 2023, when it states clear failures by some suppliers and evidence of severe harm led to significant shifts in regulation. It said prepayment users no longer pay a premium on the price cap and that, historically, they have been more likely to be satisfied with their supplier than users of other payment methods. It added that satisfaction levels have dropped between July/August 2025 and January 20261.
On debt, the paper states that total average arrears for gas and electricity where there is no arrangement to repay now stand at £3,285, described as an all time high and an 86% increase from three years ago. It says the cost of this debt flows through to all consumer bills, and that prepayment remains an important option for helping people repay debt, but only where it is safe for them to do so1.
The paper also reports that the number of people asking Citizens Advice for help with self-disconnection, where households lose supply after not topping up their meter, remains higher than before the energy crisis. It states that self-disconnection can significantly harm physical and mental wellbeing for people in vulnerable situations, and that some ambiguity in current regulation creates risks for vulnerable customers who choose to prepay but then struggle to stay on supply1.
"We explore the challenges of supporting prepayment customers, persistent self-disconnection, and whether existing safeguards provide clear guardrails for firms throughout this paper."
The paper notes that suppliers have expressed concerns that a small minority of consumers who can afford to pay are misusing the prepayment rules. It points to changes to Ofgem's regulation, increased data sharing and the smart meter rollout as opportunities to improve consumer outcomes, and argues that as more engaged and more affluent customers move into more complex and innovative products, the framework for consumers who prepay is lagging behind1.
| Measure | Figure given |
|---|---|
| Total average gas and electricity arrears with no repayment arrangement | £3,285 |
| Change in that figure over three years | 86% increase |
| Satisfaction trend | Dropped between July/August 2025 and January 2026 |
Why it matters for households
Prepayment is a payment method that requires a household to put credit on a meter before energy is used, so running out of credit can mean losing supply until a top-up is made. The paper's central concern is that this happens persistently for some households, and that the rules intended to protect them are complex and, in places, ambiguous1.
For a home's energy independence, the practical points are the removal of the price cap premium for prepayment users, which the paper says has already happened, and the debt figure, which it says is recovered through all consumer bills rather than only from those who owe it1. The paper frames rising debt and protection from self-disconnection as a twin challenge, and asks whether prepayment remains fit for the future as the wider market becomes more complex1.
What happens next
The paper is a discussion paper, and no consultation closing date, response deadline or implementation timetable is given in the published material1.
Sources1 cited
- Future of Prepayment: Discussion Paper - Citizens Advice, citizensadvice.org.uk