Prepayment review: understanding supplier charging practices and barriers to switching

Publication date
25th June 2015
Information types
Policy areas

More consumers than ever are using prepayment to pay for their energy bills (15%). Although not all prepayment customers are financially vulnerable, they are disproportionately on low incomes with more than 60% of prepayment meters installed due to debt.

This report outlines the findings of our recent review into prepayment and proposed next steps. The review was prompted by concerns that prepayment customers can face particular barriers when trying to access competitively priced deals; notably fewer tariff choices, charges for installing and removing a prepayment meter, and upfront security deposits. Our social obligations monitoring indicates that prepayment customers have very low switching rates from prepayment to credit.

The aim of this work is to ensure that prepayment customers can switch easily, are treated fairly and costs do not fall disproportionately on those who can least afford them. This report is based on information provided by the suppliers who offer prepayment tariffs plus our own market analysis.

Prepayment is a priority area for our Consumer Vulnerability Strategy. This report is the latest phase in our work to support prepayment customers.