Prepayment Meters and Vulnerable Customer Protections

A prepayment meter means you pay for gas and electricity in advance, topping up before you use it. Most are fitted with the household's agreement, but suppliers can install one without your permission if you are building up an energy debt and other ways of recovering that debt have not worked¹. Since the scandal over forced installations, the rules around this have been tightened hard: suppliers must visit your home first to check whether a prepayment meter is safe and suitable, must give you £30 of credit once the meter is in, and must pay £1,000 in compensation where a meter is inappropriately installed, switched or used¹.

There is also a group of households for whom forced installation is banned altogether: customers with medical equipment that needs constant power, those with severe mental health problems, and those who would struggle to top up their meter³. These protections sit in the supplier licence conditions Ofgem enforces, and they apply across Great Britain. This page sets out what the rules allow, what they forbid, and where a household in debt or difficulty can get free help.

The purpose of the prepayment meter regulations

The rules exist because a prepayment meter is not a neutral piece of equipment. It turns energy into something that runs out: if you cannot top up, the supply stops. That makes it a powerful debt collection tool, and also a risky one for anyone on a low income, in poor health, or without the means to get to a shop. Ofgem's position has long been that installing a prepayment meter under warrant should be used as a last resort by energy suppliers when consumers get into debt, and that suppliers can only install one where it is safe and reasonably practical for the consumer to use⁷.

The protections now come from several layers. The supplier licence conditions, which Ofgem can modify and enforce, set out what a supplier must do before, during and after an involuntary installation⁸. Legislation sets the boundaries of what a prepayment meter can be used to recover⁹. And a price cap applies to households using a prepayment meter to pay for energy, calculated using a methodology chosen by the Competition and Markets Authority¹⁰. The cap matters here because prepayment households have historically paid some of the highest unit rates, and the cap is the main thing standing between a prepayment household and the most expensive tariffs on the market.

For a household thinking about energy independence, the significance is straightforward. A prepayment meter does not cut you off from the grid, but it does change your relationship with your supplier from billing in arrears to paying upfront, and it removes the option of falling behind temporarily. The rules are designed to stop that change being imposed on the households least able to live with it.

Supplier powers to fit a prepayment meter over unpaid debt

The starting conditions are set out in Ofgem's consumer guidance. A supplier can install a prepayment meter without your permission if you are building up an energy debt and other ways of recovering your debt have not worked¹. Before that point, the supplier must make reasonable efforts to agree another way for you to repay your debt and offer support if you are struggling to pay⁸. An involuntary meter is not the first step in the process; it is what happens when the earlier steps have failed.

There are also legal limits on what the meter itself can collect. Under the Electricity (Prepayment Meter) Regulations 2006, a prepayment meter may be used to recover sums owed for gas or electricity supply, or for meter provision, at premises previously owned or occupied by the customer, and for gas meter provision or gas supply at the premises where the meter is installed⁹. And under the debt respite rules, a creditor or agent must not take steps to install a prepayment meter to recover a moratorium debt, or use an already installed prepayment meter to take such payments, unless the customer consented to the installation before the moratorium started¹². A breathing-space moratorium therefore pauses the whole process.

Two further points are worth knowing. First, being on a prepayment meter does not lock you in: households using prepayment meters can switch to another supplier as long as they do not owe more than £500, with the limit applying separately to gas and electricity⁴. Second, the principle that consent must come before coercion runs through the whole framework. In heat network regulation, Ofgem's guidance states that any installation of prepayment meters with the explicit consent of the consumer must be explored before disconnection, which should be an absolute last resort¹⁴. Where a heat network supplier switches an existing meter to prepayment mode without consent, the consumer must receive prepayment meter credit unless that is technically infeasible¹⁵.

Warrants, courts and compulsory meter fitting

Fitting a meter by force has a precise meaning in the rules. As Ofgem put it when it set out its response to the forced installation scandal, "Fitting these by force means that an energy supplier can enter a house using force to install the meter, after having obtained a court warrant."³ The warrant is the legal authority for entry, and the process around it is regulated through the supply licence conditions. In 2017 Ofgem decided to modify the electricity and gas supply standard licence conditions covering installation of prepayment meters under warrant, tightening what suppliers must do before a warrant application is made¹⁶.

The scale is not trivial. In 2016, 40,000 gas prepayment meters and 41,000 electricity prepayment meters were installed under warrant⁵. Ofgem also capped the charges: a £150 cap on charges for installing prepayment meters under warrant for customers in debt, alongside a proportionality principle covering the costs and actions of suppliers for all customers in the debt recovery process⁵. The point of the proportionality principle is that the costs of recovery should not themselves push a household deeper into debt.

What the process requires in practice, before anyone arrives at the door, is a home visit. The supplier must visit your home to understand your circumstances and check whether a prepayment meter is safe and suitable for your household¹. They must also explain why they made their decision, tell you when they plan to install the meter, explain what will happen during the installation, and tell you how to contact them if your circumstances have changed or you think they made the wrong decision⁸. There is also a long-standing rule from the gas metering regulations that no person shall install a prepayment meter as a primary meter through which gas passes to a secondary meter¹⁸.

Who is protected from forced fitting and how the ban works

The forced installation scandal of 2022 and 2023 changed the rules in a fundamental way. Ofgem's position is that for certain highly vulnerable customers, "such as those with medical equipment that needs constant power, those with severe mental health problems or those who will struggle to top up their meter, the practice is banned altogether."³ This is not a case-by-case judgement left to the supplier: it is a licence-level prohibition on forced installation for these households.

The list of households where a supplier must not install a prepayment meter at all, even with a warrant, is set out in Ofgem's guidance and is broader than many people expect⁸:

• anyone in the household with a terminal illness or severe health condition
• anyone dependent on a continuous energy supply for medical equipment
• households where everyone is 75 or over with no support
• households with a child under 2
• households where no one can top up due to a physical or mental health condition
• temporary circumstances such as pregnancy or bereavement

The Code of Practice for the involuntary installation of prepayment meters, which Ofgem confirmed in September 2023, has been incorporated into mandatory Supply Licence Conditions¹⁹. That matters because a code of practice is guidance, while a licence condition is something Ofgem can enforce against a supplier's licence. The Welsh Government's fuel poverty priority actions, for example, record the same shift from voluntary code to licence condition as a protection for Welsh households¹⁹.

Where a supplier gets this wrong, there is now a financial consequence. Ofgem has set compensation at £1,000 for inappropriate installation, switching or use of a prepayment meter². Ofgem has also been blunt about supplier performance in this area, noting in its own commentary that some suppliers are helping vulnerable customers while others are falling short¹⁷.

Smart meters moved onto prepayment settings

A smart meter removes the need for a visit. Smart meters can operate in credit or prepayment mode, and a supplier with a warrant can remotely switch an existing smart meter into prepayment mode rather than entering the home at all¹. The same protections apply: the £30 credit must be given once the meter has been installed or remotely switched¹, and the pre-installation checks of the household's circumstances still have to happen.

The safety rule follows the meter, not the door. Government guidance on smart meter rights states it plainly: "Your smart meter should only ever be in prepayment mode if it is safe and works for you to use this payment method."²⁰ A remote switch is less dramatic than a forced entry, but the consequence for the household is identical: the supply stops when the credit runs out.

Two further developments are worth watching. Ofgem's debt strategy work includes trials that will focus on proposals to switch existing smart meters into prepayment mode in situations of domestic customers moving homes²¹, which would extend remote switching to a new scenario. In the other direction, the smart meter network operator notes that switching from an existing gas or electricity prepay meter to a smart credit meter is straightforward for customers who are eligible²², so a prepayment household that clears its debt or improves its situation can move back to credit billing.

Prepayment and households in fuel poverty or at risk

The statistics explain why the regulator treats this as a vulnerability issue and not just a debt issue. In Scotland's 2024 house condition survey, a higher proportion of households with a prepayment meter, for electricity, gas or both, were in fuel poverty: 39%⁶. The 2021 survey put the figure at 33% for prepayment households, compared with 17% for households without one²³. The Scottish Government's fuel poverty strategy records that fuel-poor households in inefficient homes are more likely to have a prepayment meter, 29% against 14% for non-fuel-poor households²⁴. Whichever figure you take, prepayment households are around twice as likely to be fuel poor as everyone else.

The mechanism is not hard to see. A prepayment meter collects debt through a standing charge and a repayment rate added to each top-up, so a household in debt pays more per pound of credit than a household that is not. When money is short, the meter self-disconnects: the household rations its own energy rather than being rationed by the supplier. Ofgem has recognised the resulting risk in its policy on debt costs, confirming that any extra costs from its debt recovery work would not be passed onto customers who use prepayment meters for their energy²⁵.

Help exists at the point of disconnection as well as before it. The Scottish Government's fuel insecurity funding supports households including those with prepayment meters and at risk of imminent disconnection, working through bodies such as the Fuel Bank Foundation²⁶. For a household on prepayment, the practical protections are therefore threefold: the ban on involuntary installation if the household is vulnerable, the cap on what the meter can charge, and emergency voucher schemes that keep the supply on when credit runs out.

Clearing arrears and current reform ideas

Ofgem's debt strategy, set out in April 2025, has four components: "1) resetting debt through a proposed Debt Relief Scheme 2) Reforming how suppliers manage debt by increasing Debt Standards 3) Helping to prevent debt from occurring by looking at billing and access to credit and 4) Energy affordability support."²⁷ The Debt Relief Scheme is the most significant idea for prepayment households, because arrears are what drives involuntary metering in the first place.

The case for it was made in Ofgem's December 2024 paper on resetting the energy debt landscape, which argued for a debt relief scheme and also recorded that an earlier initiative to levelise prepayment debt costs across payment types had been paused²⁸. Levelisation would have spread the cost of prepayment debt across all customers rather than concentrating it on prepayment households; its pause leaves those households carrying those costs for now.

In the meantime, the standards suppliers must meet have been raised. Ofgem has stated that energy suppliers should offer debt repayment plans at the earliest opportunity and consider offering temporary debt repayment holidays, where appropriate²⁵. For a household on a prepayment meter with debt collected through the meter, a repayment holiday means the rate charged on each top-up can be reduced or paused, which directly affects how far a given top-up goes.

Support at no cost, dispute routes and the Extra Help Unit

No household in debt needs to negotiate this alone, and the free services are substantial. Citizens Advice offers information and support on struggling to pay bills, problems with your energy supplier or supply, saving energy at home and getting a better energy deal²⁹. In England and Wales, the consumer service is on 0808 223 1133, with a Welsh language line on 0808 223 1144, open Monday to Friday, 9am to 5pm; in England you can also call 0808 144 8844³⁰.

Citizens Advice may refer you to the Extra Help Unit if you need support with a difficult or urgent complaint, cannot deal with your energy supplier on your own due to personal circumstances, are considered vulnerable, or are at risk of being disconnected from an energy supply³¹. If a complaint cannot be resolved with the supplier, it goes to the Energy Ombudsman, which is approved by Ofgem to handle service disputes in the energy sector; for energy complaints, call 0330 440 1624³².

National Energy Action provides free advice about energy bills and keeping warm and safe at home, plus benefits advice and income maximisation, across England, Wales and Northern Ireland, on 0800 304 7159; a British Sign Language interpreter can be requested³⁴. Local schemes exist too, from Birmingham's energy help service to Tameside's free telephone advice service on benefits, money and bill problems³⁴. If you are worried about your energy bills, the Ombudsman's own advice pages point to these services as the first port of call before a dispute escalates³⁵.

Possible future directions for the regulations

The direction of travel is visible in what Ofgem has already published. The debt strategy's four components, from the proposed Debt Relief Scheme to affordability support, are the framework for the next few years²⁷. The trials on switching smart meters into prepayment mode when customers move home would extend remote switching to a new situation, and are the proposal most worth watching for households in debt²¹. The raised debt standards, with repayment plans offered at the earliest opportunity and repayment holidays considered, are already in force as expectations on suppliers²⁵.

The unresolved question is debt itself. Ofgem's debt relief paper makes the case that the accumulated arrears of recent years cannot be collected through meters without harm, and the pause on levelising prepayment debt costs means the distribution of those costs is still unsettled²⁸. For households, the practical reading is this: the protections against involuntary installation are now strong and enforceable, the compensation regime gives suppliers a financial reason to get it right², but the underlying driver, household debt, is still being worked through. A household that engages with its supplier early, takes up a repayment plan, and calls the free advice services before a warrant is applied for has the rules on its side; the rules work best before the warrant exists.