Prepayment Meters and Vulnerable Customer Protections

A supplier in Great Britain can install a prepayment meter without a household's permission only in narrow circumstances: where the customer is building up an energy debt and other ways of recovering that debt have not worked¹. Even then the supplier must visit the home to understand the circumstances and check whether a prepayment meter is safe and suitable for that household, must make reasonable efforts to agree another way to repay the debt, and must offer support to a customer struggling to pay¹. Where installation does go ahead, by warrant or by remotely switching an existing smart meter into prepayment mode, the supplier must give £30 credit per meter¹.

For certain highly vulnerable customers the practice is banned outright. Ofgem has stated that for customers such as those with medical equipment that needs constant power, those with severe mental health problems and those who will struggle to top up their meter, forced installation is banned altogether³. Ofgem also sets a compensation level of £1,000 where a prepayment meter is installed, switched or used inappropriately⁴.

These rules are licence obligations on suppliers, not something a household arranges for itself. Prepayment leaves a home entirely dependent on a supplier's systems, a top-up network and, for a smart meter, a remote command path: the protections described here limit how that dependence can be imposed, they do not remove it. Ofgem is the independent energy regulator for England, Scotland and Wales⁵; Northern Ireland has its own regulator and its own supply licences.

What the prepayment meter rules are for

Ofgem's rules protect customers in debt where a supplier wants to install a prepayment meter¹⁰. The purpose is not to prevent prepayment as such: many households choose it and manage well on it. The purpose is to stop a meter being imposed on a home where self-disconnection would follow, where nobody can physically top up, or where losing supply would put someone at risk.

The framework sits in several layers. The oldest is legislation: the Electricity (Prepayment Meter) Regulations 2006 set out what sums a prepayment meter may recover, covering gas or electricity supply and meter provision at premises previously owned or occupied by the customer, and gas meter provision or gas supply at the premises where the meter is installed¹¹. Separate gas regulations from 1998 prohibit installing a prepayment meter as a primary meter through which gas passes to a secondary meter¹².

Above that sit the supply standard licence conditions. Ofgem modified the electricity and gas supply standard licence conditions covering installation of prepayment meters under warrant in 2017¹³, and in September 2023 confirmed that the Code of Practice for the involuntary installation of prepayment meters would be incorporated into mandatory supply licence conditions¹⁴. The code sets out how suppliers should deal with a customer facing an involuntary prepayment meter install¹⁵, and it is published by Ofgem as guidance on involuntary prepayment meters¹⁶.

Price protection has been a parallel strand. A prepayment price cap, sometimes called a safeguard tariff, applied to households using a prepayment meter to pay for energy¹⁷, and the prepayment meter cap was calculated using a methodology chosen by the Competition and Markets Authority¹⁸. The wider energy price cap now carries that function, and Ofgem's role across the sector is set out in more detail on the page covering Ofgem.

When a supplier may install a prepayment meter for debt

Two conditions must both be met: the customer is building up an energy debt, and other ways of recovering that debt have not worked¹. Ofgem's long-standing position is that installing prepayment meters under warrant should be used as a last resort by energy suppliers when consumers get into debt, and that suppliers can only install a prepayment meter where it is safe and reasonably practical for the consumer to use¹⁹.

Before going ahead, a supplier must:

• Make reasonable efforts to agree another way for the customer to repay the debt, and offer support if they are struggling to pay²
• Visit the home to understand the circumstances and check whether a prepayment meter is safe and suitable for the household¹
• Explain why it has made its decision, say when it plans to install the meter, explain what will happen during the installation, and say how to contact it if circumstances have changed or the decision looks wrong²

Debt does not automatically mean prepayment. Ofgem's consumer standards state that suppliers should offer debt repayment plans at the earliest opportunity and consider offering temporary debt repayment holidays, where appropriate²⁰. A statutory protection also applies during a Debt Respite Scheme moratorium: a creditor or agent must not take steps to install a prepayment meter to take payments in respect of a moratorium debt, or use an already installed prepayment meter to take such payments, unless the debtor consented to installation before the moratorium started²¹.

Prepayment is also a step before disconnection rather than an alternative to protection. Ofgem's heat networks guidance frames the sequence plainly: any installation of prepayment meters with the explicit consent of the consumer must be explored before disconnection, which should be an absolute last resort²². That principle, and the separate heat network rules, matter for homes on communal heat.

Being on prepayment with a debt does not lock a household to its supplier. A prepayment customer can switch while owing up to £500, with the limit applying separately to gas and electricity meters⁶. Switching rules generally are covered under supplier licensing.

Forced installations, warrants and the court process

Fitting a meter by force means an energy supplier can enter a house using force to install the meter, after having obtained a court warrant³. The warrant route is the formal, court-supervised end of debt recovery, and it has been used at scale: in 2016, 40,000 gas prepayment meters and 41,000 electricity prepayment meters were installed under warrant⁸.

Warrant costs were a grievance in themselves, since the charge was added to the debt of a customer who could not pay. Ofgem introduced a £150 cap on charges for installing prepayment meters under warrant for customers in debt²³, alongside a proportionality principle covering costs and actions of suppliers, for all customers in the debt recovery process⁸.

The 2023 rules added evidence requirements around the visit itself. Audio or body cameras must be worn by the lead supplier representative during all warrant installations or site welfare visits, and all audio and video recordings must be available for audit²⁴. A £30 credit per meter applies on all warrant installations and remote switches, described as a short-term measure²⁴. Suppliers must also re-assess the case once a customer has repaid debts owed, contacting the customer to offer an assessment of whether a prepayment meter remains the most suitable and preferred payment method²⁴.

The ban on forced installation, and who it covers

For the most vulnerable customers the answer is not a safeguard but a prohibition. Ofgem has banned suppliers from installing prepayment meters by force entirely for the most vulnerable²³, and describes the categories as including those with medical equipment that needs constant power, those with severe mental health problems and those who will struggle to top up their meter³.

Ofgem's consumer guidance sets out the household types where a supplier must not install:

The Code of Practice separates a high risk category, marked "do not install", from a medium risk category that includes temporary situations such as pregnancy and bereavement¹⁵. Where a household is not in the expanded vulnerable group list, suppliers must still conduct a vulnerability and affordability assessment before fitting a prepayment meter²⁴. Further assessment is triggered where there are children aged 5 or under in the household, residents have other serious mental, developmental or physical health conditions, or there is a temporary situation that makes residents vulnerable such as pregnancy or a recent bereavement²⁴.

The overarching condition is one a supplier cannot contract out of:

Households at risk should note that these lists are not self-executing. A supplier can only apply them if it knows the circumstances: the practical step is telling the supplier, which then checks whether a prepayment meter is suitable¹⁰. Vulnerability criteria used in advice guidance include dependence on energy for medical equipment, being over 75 or under five, physical or mental health conditions, and other difficulties in the home¹⁰.

Smart meters switched into prepayment mode

Smart meters can operate in credit or prepayment mode²⁵, and a supplier can remotely switch an existing smart meter to prepayment mode rather than seeking a warrant¹. That makes the change cheap, fast and invisible from outside the home, which is precisely why the rules were extended to cover it.

Ofgem has confirmed that references to the installation or removal of an involuntary prepayment meter include the switching of any electricity meter to or from such a mode²⁴. In practice the same protections apply to a remote switch as to a physical installation: the prohibited household categories, the pre-installation assessment, the £30 credit per meter, and the reassessment once debt is repaid²⁴. Government guidance is explicit on the test: a smart meter "should only ever be in prepayment mode if it is safe and works for you to use this payment method"²⁵.

Ofgem's debt work includes trials that focus on proposals to switch existing smart meters into prepayment mode in situations where domestic customers are moving homes²⁷. Moving the other way is generally easier: switching from an existing gas or electricity prepay meter to a smart credit meter is described as straightforward for customers who qualify²⁸. The related question of switching to prepayment without consent and of a supplier changing payment method during debt is covered separately.

For a household weighing energy independence, remote mode-switching is the clearest illustration of how little of a metered supply is under the occupant's control. The meter is the supplier's asset, the communications path is national infrastructure, and the payment mode can change without anyone entering the property. Self-generation reduces consumption but does not remove the metering relationship.

How prepayment bears on vulnerable and fuel-poor households

Prepayment and fuel poverty overlap heavily. In Scotland, 39% of households with a prepayment meter for electricity, gas or both were in fuel poverty in 2024⁹; the equivalent figure recorded for 2021 was 33%, against 17% for other households²⁹. Scottish Government analysis of inefficient homes found fuel poor households more likely to have a prepayment meter than non-fuel poor households, at 29% against 14%³⁰. These are Scottish statistics and the pattern in other nations is addressed under fuel poverty policy.

The mechanism is straightforward: a prepayment household that cannot afford to top up simply goes off supply, with no billing cycle, no arrears letter and no visible trigger for intervention. That is why the protections are framed around whether someone is able to top up rather than whether they are willing to pay.

Crisis support exists alongside the licence rules. The Scottish Government's Fuel Insecurity Fund supports the Fuel Bank Foundation, whose help includes those with prepayment meters and at risk of imminent disconnection³¹. Wider price support has also had to be delivered differently to prepayment customers: under the Energy Bill Support Scheme, prepayment customers were to receive smart meter credits or payment vouchers where they had a traditional prepay meter, providing top-ups for their meter³².

Prepayment also affects tariff choice. Citizens Advice, responding to Ofgem's consultation on standing charges, argued that prices should not create an unjustified incentive for consumers to choose a payment type that may not be suitable for their needs³³.

Debt relief and the proposals now in play

Ofgem's debt strategy has four components: resetting debt through a proposed Debt Relief Scheme; reforming how suppliers manage debt by increasing debt standards; helping to prevent debt from occurring by looking at billing and access to credit; and energy affordability support³⁴. The case for a debt relief scheme was set out in a 2024 Ofgem paper³⁵.

A second strand is levelisation: spreading debt-related costs across payment types so prepayment customers do not carry a disproportionate share. Ofgem's initiative to levelise prepayment debt costs across payment types was paused³⁵. Citizens Advice has said it continues to support some levelisation of payment method cost differentials, that levelising the bad debt element of unit rates for standard credit would be a sensible way to do this, and that the approach should apply to standard credit customers as well as prepayment³³. In its 2023 consultation on debt cost recovery, Ofgem proposed that any extra costs would not be passed onto customers who use prepayment meters for their energy²⁰.

There is also an existing protection against charges being loaded onto a meter incorrectly. Ofgem's guidance on Standard Licence Condition 21BA states that consumers paying by prepayment meters are protected by the prohibition where such charges are applied to a prepayment meter, including where a prepayment meter has not been updated with the correct tariff or balance³⁶. How proposals of this kind progress from consultation to licence change is described under energy consultations and the wider regulation and policy guide.

Free help, complaints and the Extra Help Unit

Free, independent help is available before a complaint escalates. Citizens Advice offers information and support on struggling to pay bills, problems with a supplier or supply, saving energy at home and getting a better energy deal³⁷.

National Energy Action provides free advice about energy bills, keeping warm and safe at home, and can also help with benefits advice and income maximisation⁴¹. Local schemes complement this: the Local Energy Advice Programme offers a free telephone advice service to help with benefits, money and bill problems⁴⁴.

Where a complaint cannot be resolved with the supplier, the Citizens Advice consumer service may refer a case to the Extra Help Unit. Ofgem lists the referral grounds as needing support with a difficult or urgent complaint, being unable to deal with the energy supplier alone due to personal circumstances, being considered vulnerable, or being at risk of being disconnected from an energy supply⁴⁵. The Energy Ombudsman is approved by Ofgem to handle service disputes in the energy sector⁴³; the full route is set out under energy complaints and redress.

Citizens Advice is the official advocate for heat network consumers in England and Wales⁴⁶, covers consumers in England and Wales²², and jointly commissions with Ofgem the Energy Consumer Satisfaction Survey of domestic energy consumers in England, Scotland and Wales⁵.

Where the rules may go next

The Code of Practice was welcomed as needed but incomplete. National Energy Action noted that many still faced uncertainty while the new framework awaited reflection in licence conditions¹⁵, which Ofgem confirmed in September 2023¹⁴.

On the wider consumer protection framework, National Energy Action's response to the government's consultation was built around six key asks⁴⁷. Its stated positions include that the consumer protection system should not pursue simplicity at the expense of vulnerable households, who need tailored, targeted support; that trusted local advisers and community-based advocates should be embedded within the framework; that the Warm Homes Agency should blend a national framework for advice with local delivery; that success should be measured with outcomes for consumers, not just outcomes in the property, using wellbeing measures alongside EPCs; that a clear, centralised redress system should be established, underpinned by robust first-line guarantee protections backed by a solidarity fund where installers can no longer remediate defective work; and that a single end-to-end system with continuous quality assurance, clear accountability and strong enforcement levers should be created⁴⁷. It also argues that consistency in protections and installation quality is important to avoid a two-tier market, where outcomes depend on the funding route through which measures are delivered⁴⁷.

Ofgem's supervision produces enforcement as well as rules: it has found suppliers helping vulnerable customers while others fell short²³, and Utilita Energy customers received compensation after Ofgem uncovered an additional support credit failure³². For a household, the practical conclusion is that these protections are enforced after the fact as often as they are observed in advance, and that telling a supplier about vulnerability in writing is what puts the rules into play.