How Can You Owe Money on a Prepayment Meter?
We are going through an energy crisis, and the cost of utility bills is increasing rapidly. This is likely to get worse before it gets better, with Ofgem increasing the maximum amount that a gas and electric company can charge by 54%.
If you’ve had trouble paying for your energy usage in the past, you may have been put on a prepayment meter. This is where you need to pay for your energy before you use it. It’s basically like pre-credit for your phone, but for your gas and electric instead.
Given that it’s prepaid, it might be a surprise if you’ve managed to accumulate a debt on a prepayment meter, but it is possible. The main reasons that you may owe money on a prepayment meter is if the utilities provider has given you emergency credit.
What is an Emergency Credit?
Emergency credit is additional credit for gas and energy that is provided if you run out of prepaid credit. If you can’t afford to top this up, providers will either automatically, or once you ask them, add some emergency credit to your account so that you can keep your electricity and gas on.
This means that you won’t be stuck without heating or hot water, but it also means that this debt can accumulate if you don’t get on top of it. One of the main things that can catch you out when you’ve recently started on a prepayment meter, is the daily standing charge. This is a fixed cost to access the electricity and gas supply, and is in addition to the actual energy that you use in your home.
When you next go to top up your prepayment meter, the amount you owe for the emergency credit will first be paid back, before the rest of your payment is added to credit for future use. This can mean that you fall into the trap of always being behind on your prepayment credit, just like you can be behind on a regular bill.
What to do if Your Power Supply is About to be Cut Off
If you have used all of your Emergency Credit and you don’t have any money to purchase additional credit, you should contact your power supplier. They may be able to provide you with Additional Support Credit. It is really important to remember that you have to pay this back too, so make sure you are budgeting for all the credits you are using as best you can.
If you are particularly vulnerable or believe that you need additional support through disability or circumstances, you may be eligible for further assistance. Again, the best way to understand what you might be eligible for is to contact your supplier and explain you situation.
What to do if You Owe Money on a Prepayment Meter
As mentioned above, any money you owe on your prepayment meter will be deducted next time to top it up with additional credit. If you are unable to repay this amount and add further credit to your account, you may be without power and gas.
If you find yourself in a significant amount of debt and you are unsure of what to do, there are some organisations that can help. StepChange is a charity that offers free debt advice to people who are struggling with their repayments. Other options include the National Debt Line or even the Citizens Advice Bureau.
All of these services will help you arrange a repayment plan and can point you in the direction of additional help and support with clearing your debts.
Summary
You can accumulate a debt on a prepayment meter if you have accessed Emergency Credit that you haven’t paid back. Emergency Credit is added to a prepayment meter when the prepaid credit runs out, and this is done to avoid having energy supply cut off.
In some circumstances, Emergency Credit will be added automatically by your supplier. In some circumstances, you will need to make a specific request for Emergency Credit. Either way, this credit does need to be paid back, and this is how a debt on a prepayment meter can be accumulated.
