Consumer Vulnerability Strategy: Prepayment meters

We are currently updating our consumer vulnerability strategy and have published an open letter on our progress. Please contact CDconsultations@ofgem.gov.uk if you would like to engage with us on the strategy.

Increasing numbers of consumers in the domestic energy market have prepayment meters (PPM). Our research shows that PPM customers tend to have high vulnerability representation.  

PPM customers face particular barriers to accessing better deals such as fewer competitive tariffs, installation, removal and warrant charges and upfront security deposits. We want to remove these barriers to make sure that prepayment customers can access better deals by switching to other PPM tariffs or to other payment methods, where appropriate.

In December 2015 we published our proposals to improve outcomes for prepayment customers that have since been implemented. A principle outcome were changes to warrant use and charges.

Prepayment meter price cap

From 1 April 2017, the amount of money a supplier can charge a domestic prepayment meter (PPM) customer will be subject to a transitional price cap. We are responsible for updating the cap every six months. The level of the cap for the most recent and any previous charge restriction periods can be found on our Prepayment meter price cap page. 

Self-disconnection and self-rationing

Self-disconnection occurs when prepayment meter (PPM) customers experience an interruption to their electricity or gas supply due to a lack of credit on their account or meter. Closely associated with this is self-rationing for PPM customers. This is when customers may deliberately limit their energy use to save money, or restrict spending in other essential areas in order to keep their meter topped up.

We are concerned about the impact of self-disconnection and self-rationing on PPM customers and the level of support provided to these customers. In November 2018 we launched a call for evidence  to gather evidence on the scale of the problem, quality of support and supplier practices in this area. The call for evidence closed on 10 December 2018. We will consider all the evidence received and publish a summary of responses and our proposed next steps by Spring 2019. 

Changes to warrant uses and charges

In January 2018, measures took effect to protect consumers from detrimental effects as a result of having a prepayment meter installed under warrant. As well as a £150 cap on charges for installing pre-payment meters under warrant for customers in debt, these measures prohibit suppliers levying any prepayment meter warrant charges in some circumstances (for example for people in severe financial difficulty) and banning installations entirely for people for whom the experience would be severely traumatic, for example due to mental health issues.

Debt Assignment Protocol

The Debt Assignment Protocol (DAP) is the mechanism that suppliers use to transfer debt between one another when an indebted PPM customer switches supplier. We obligated suppliers to increase the amount of prepayment debt consumers could have when switching from £200 to £500. 

Through the publications and update feed below you can access our publications and outputs produced in relation to prepayment meters.

Publications and updates

  • Published: 22nd Sep 2014
  • Open letters and correspondence
  • 1 Associated documents
We have reviewed the Debt Assignment Protocol – the industry process used to transfer debts between suppliers when indebted PPM customers try to switch. In this letter we set out the results of our review and the next steps to address the issues we have...

  • Published: 24th Sep 2012
  • Open letters and correspondence
  • 2 Associated documents
This letter sets out the measures suppliers have agreed to take to increase the number of customers using the Debt Assignment Protocol, the process for prepayment meter customers switching supplier with a debt, following the completion of Ofgem's review.

  • Published: 21st Jul 2009
  • Open letters and correspondence
  • 1 Associated documents
This letter gives an update on suppliers’ activities to replace and recalibrate token prepayment meters. It also sets out the minimum steps we expect suppliers to take when withdrawing token PPM facilities to ensure that no customer is left without supply

  • Published: 2nd Feb 2009
  • Open letters and correspondence
  • 1 Associated documents
This letter gives an update on suppliers’ activities to replace and recalibrate token prepayment meters. It also sets out the minimum steps we expect suppliers to take when withdrawing token PPM facilities to ensure that no customer is left without supply

  • Published: 30th May 2008
  • Open letters and correspondence
  • 12 Associated documents
This letter follows Ofgem’s fuel poverty summit on 23 April & sets out evidence that Ofgem has on customers switching to more expensive providers.

  • Published: 10th Aug 2007
  • Decisions
  • 1 Associated documents
This letter provides an update for April to June 2007 and highlights recent action by the suppliers to tackle the recalibration of token pre-payment meters

  • Published: 26th Jun 2007
  • Decisions
  • 1 Associated documents
Ipsos MORI was commissioned by Ofgem, the regulator of the gas and electricity industry to conduct a qualitative consultation with Prepayment Meter (PPM) customers.

  • Published: 25th May 2007
  • Reports and plans
  • 1 Associated documents
This letter provides an update for February and March 2007 and highlights recent action by the suppliers to tackle the recalibration of token pre-payment meters

  • Published: 23rd Apr 2007
  • Decisions
  • 1 Associated documents
Issue of Token Meters and the build up of debt

  • Published: 23rd Apr 2007
  • Decisions
  • 1 Associated documents
Iberdrola - Takeover of Scottish Power

Pages