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Can someone explain prepayment meters to me

(27 Posts)
BleurghUna Tue 23-Aug-11 18:00:31

Thought these were designed to help people budget for their fuel payments throghout the year, by paying the same amount into a meter every month. But I have read a lot of threads on here by people with meters saying they are worried about their winter fuel bills. Surely if they are prepaying for their fuel they won't get a bill? Or am I misunderstanding?
WE pay for our fuel by monthly direct debit, duel fuel, online, this si supposed to be the cheapest way, so why doesn't everyone do this, especially those who are struggling financially?

littleducks Tue 23-Aug-11 18:14:30

You pay for elec/gas via a card or key but when the money runs out the gas/elec stops!

iklboo Tue 23-Aug-11 18:36:06

Not everyone has enough money up front every month to pay a direct debit & some people have bank accounts that don't pay out direct debits. You don't pay a set amount per month on a pre pay meter, you pay for what you use, when you use it. If it's a 'heavy' month, you could run out of money on the meter and not have any money to buy more IYSWIM.

Thehusbandsatcricketagain Tue 23-Aug-11 18:56:58

the onlything to be said about them is they rob you blind,elec/gas is priced more expensively.I have a monthly dd with mine,pay same amount throughout year,easy to budget & never run out oor have to worry

BleurghUna Tue 23-Aug-11 19:07:29

Thanks both - I was wondering if prepayment meters were cheaper than direct debit, but it doesn't look as if they would be, and they definietely sound more inconvenient. I think I will stick with direct debit duel fuel and wearing lots of woolly jumpers for now!

Iklboo - I am surprised that not all bank accounts allow direct debits. You can save a lot and budget better by having direct debits, I can't understand why a bank wouldn't let you do this, especially as it's all done electronically now.

LawrieMarlow Tue 23-Aug-11 19:13:15

I have a basic bank account (have to due to financial problems) and it has direct Debits. No overdraft or cheques but has debit card and can do everything I need to.

I thought sometimes if people have gone into arrears that they have to have a prepayment meter and that the cost per unit is more. Seems unfair.

CokeFan Tue 23-Aug-11 19:14:37

On some prepayment meters there's also a daily charge, so you still pay even if you don't use any electricity/gas.

mumatron Tue 23-Aug-11 19:20:23

Don't assume pp metetrs are more expensive! That is largely a myth these days. Call your current supplier and ask for the unit prices for both meters.

A lot of people will actually find pp cheaper as it makes them very aware of what they use on a daily/weekly basis. They will budget much better when they can see exactly how the credit is going down.

I work for a utility company, in a prepayment based department so I know a fair bit about them.

KenDoddsDadsDog Tue 23-Aug-11 19:26:08

PPMs on the whole mean you can't benefit from price fix products. So when prices go up then so do PPMs. Most suppliers give a discount for dual fuel DD so you will be benefiting from that.
They can be a better option but not always.

mumatron Tue 23-Aug-11 19:30:18

Yes as ken says you won't benefit from any duel fuel deals or direct debit discounts etc.

BleurghUna Tue 23-Aug-11 20:23:40

Well we get 3 discounts: one for dual fuel, one for DD and one for online (no paper bills) so I think that is probaly the best for us. Thanks for all your posts!

Grumpla Tue 23-Aug-11 20:29:07

I found PP meter quite a lot more expensive that was about 7 years ago though. Also NOT very convenient having to schlep to the shops to top it up before you can finish cooking your tea!

BleurghUna Tue 23-Aug-11 22:37:14

Grumpla shock So if it's more expensive and you don't get any discounts, and you hae to dash to the shops to top it up, what's the point? Why don't you just go on a normal tarriff?
Off to bed now - will catch up tomorrow.

Naoko Tue 23-Aug-11 23:27:30

I'm in a rented house with a prepayment meter. My landlord won't let me remove it. Many are the same - probably due to do with the risk of people moving out without paying the bill. I understand it, I guess, but it's a pain in the neck. At least this one is an improvement over the one we had in a previous rented house - here, if it runs out over a weekend (when shops you can top it up in aren't open) it doesn't actually turn the power off till Monday morning, and takes the money for that out of the next top-up. The one we had in the other place had the usual £5 emergency credit, but if that ran out (very quick to do, was a 6 bed student house!) that was that, even if it's 2am on a saturday night.

And yes I am worried about this winter - last year we were putting in more than £30 a week when it was very cold. I expect it'll be more this year, if it gets that cold again.

RedSpike Wed 24-Aug-11 00:44:36

Companies are no longer allowed to charge a premium for pre-payment meters but they can charge for real metering costs which are higher than other billing sytems - or so they argue, which means they can still inflate the tariff and usually do.

belledechocchipcookie Wed 24-Aug-11 01:18:35

It's more expensive, they usually smack on a 'standing charge' also. Don't do it! Stick some money aside for the bill.

Wabbit Wed 24-Aug-11 01:40:14

If you have a PPM and wish to change to paying DD monthly, the company will run a credit check on you to see if you are 'good' for the DD payments, many people have financial issues that affect their credit status, especially those who have been unable to pay a bill in the past and have resolved the issue by having a PPM installed, (they can be 'set' to recoup a debt). Also, the customer has to pay (something in the region of £50) to get each meter swapped back to non PP

BleurghUna Wed 24-Aug-11 13:04:37

Oh dear that doesnn't sound very good! I always imagined a meter would be more hi-tech and easier to use nowadays, probably cheaper too as you could see how much you were using, how much you had used this week, this month etc. But I don't think there would be any advantage for us in changing to the sort of meter you describe on this thread.
What an inconvenience having to leave the house to top it up!
Maybe I am confusing with Smart meters? Anybody know about those? Maybe I should start another thread?
Thanks anyway

mumatron Wed 24-Aug-11 13:44:09

Smart meters are what most suppliers will be installing in the near future. I know a bit about them, they can be topped up remotely but not all suppliers offer this either.

BleurghUna Wed 24-Aug-11 18:57:41

Yes I think smart meters are what I meant! Doh! Will everyone get one automatically? Will it cost any extra?

RedSpike Wed 24-Aug-11 21:15:42

Smart meters will record your electricty usage every half hour - you will be charged more for using electricity at peak times.

Theoretically you can reduce your bills by using power during off peak...if you can be flexible. Currently smart meters are only offered by a few companies but the National programme to install to every household will start 2014 and finish 2019. You many find that due to the limited number of companies offering smart meters before 2014 the market isn't as competitive as you would hope, so you may be better off sticking with the old fashioned meter until the official rolls out in 2014.

mumatron Wed 24-Aug-11 21:20:59

smart meters will be installed as standard in future i think. not only for pp but billing meters too.

there's loads of tech being developed atm, things we wont see for years yet.

wrt to costing more, I can can only say what we propose to do as a company. Our current smart meter customers (trial basis atm) pay the same as customer on key meters. they are also provided with something like this that shows exactly what is being used. It has a coloured light on the side that shows green when you're within a 'normal' usage level, amber as you use more (boil kettle, for example) and red for high usage (tumble drier)

Imo it is the monitor that really helps with saving money. if you are on a billing meter see if your supplier provides a tariff like iplan the monitor on this one allows you to set limits on your usage. your electricity wont cut out when you reach that limit but it will warn you iyswim. this would 100% be cheaper than a ppm.

see what your supplier offers, i think they all have a monitor based tariff of some sort. beware though they may not be available with fixed price tariffs.

mumatron Wed 24-Aug-11 21:23:33

this would 100% be cheaper than a ppm.

that sentence should have been deleted! sorry!

<must check before posting!>

BleurghUna Thu 25-Aug-11 13:04:10

Thanks mumatron.
Can I ask what supplier you work for? We are with Eon. We tried to join their smart meter pilot scheme but it was oversubsribed.

sheepgomeep Fri 26-Aug-11 20:24:01

If you live in a council house then you have no choice but to have a prepayment meter (in most council properties anyway)

I have enquired about going on to direct debit but no go.

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