MSE News: Prepay for your energy? You could keep today's cheaper rates for a little longer

doesntnotcompute

zeczyguy said:

I have just been on to E-on Next and they told me that if I top up with a large amount I will indeed delay the update but then when I top up after the new rates apply I will then be charged at the new rates and will have to pay for the difference as I will be charged per unit at the new rate of whatever I use.

This is discussed in the article, it's the way the meters are designed to operate and always have operated during previous price changes - you buy credit in advance at the current price and then use it.

Ofgem says in the article, "There is no mechanism under the price cap specifically for suppliers to reclaim money associated with customers building up credit in this way".

Even if a supplier proposed to charge someone in the way you describe they couldn't calculate an accurate amount, they won't have a meter reading from midnight on April 1st. What are they going to do, calculate and charge everyone with a prepayment meter (that's in credit) an estimated fee for what they claim is an underpayment (but Ofgem say otherwise) from April 1st?

Sounds like you spoke to a not well informed customer service advisor?

vanillapigdog

I did this back in 2019 with Ebico and SSE. I topped up my meters enough to last for 2 years. SSE chased me and attempted to back date everything. 

I went to the Energy Ombudsman and SSE eventually backed down and removed the debts but the Ombudsman still insisted that I update my meters going forward to the new higher prices AND insisted that SSE were within their rights to backdate the charges and that I was fortunate that they had allowed me to do this

From speaking to friends on this who did similar, they were all bullied with the threat of backdating costs to strong-arm them into updating meters to the new higher prices 

I don't believe they won't do similar this time

Faz

I've spoke with E.ON Next who have emailed me back suggesting the information shared on MSE is incorrect.  Their response as below:

Thank you for getting in touch, We know Martin Lewis has advised customers to do this however, suppliers are in agreement this won't work. If you were to top up a maximum amount and let it run, the next time you go and top up, the charges will backdate to the 1st of April and and a debit will be added onto your meter for the difference between the new prices and the old. We do not recommend our customers to do this as this is only a temporary fix and could put you into debt. I hope the above helps Cheers,

E.ON Next - Digi Operations Can anyone from the MSE Team provide clarity on this?

GingerTim

I was waiting for the energy companies to respond to the MSE advice...

PC2016

   I do not like being right especially when it comes to saving a few quid. However I see why my concerns were dampened I did not use the term "Technical Gremlin" - Joking aside, my ideas and others who are airing similar concerns were at least mentioned by Martin - kudos - I did top-up a little extra but held onto another £150 as that would be a back of an envelope 65 day pay back amount if it all goes pear shaped and pear shaped it will go... 

GingerTim

From the horse's mouth, as it were. Perhaps MSE should alter the title of this thread...

https://www.moneysavingexpert.com/news/2022/03/martin-lewis--warning-the--top-up-prepay-meters-before-april--tr/

This is all about the 'max top-up tip'

A few weeks ago, we said that if you top up a non-smart prepayment meter before the 1 April's 54% energy price cap rise, you will be charged at the rate on the day you top up, until you top up again.

We had written confirmation of this from all major firms (except Scottish Power who disagreed) and the regulator, Ofgem. The obvious tip therefore – for anyone who isn't in energy debt and could afford it – was to max your top-up before 31 March and not top up again until it was all used. That way, you could keep using energy at the lower price as long into April as possible. Again, that this would work was confirmed by the regulator.

This information is now less certain

At the time, we reported Scottish Power's rejection of this tip to Ofgem to see if it was breaking any rules. Ofgem has been investigating, and it has now got back to us with some surprising findings.

Separately, we contacted E.on after some MSE users reported that it had given them contradictory information to what we'd said. It then gave us a statement seemingly at odds with its original one and started to say that any energy used in April would be charged at April's rate regardless.

I discussed this with the regulator today. I've only been given provisional thoughts, and this is not cast iron, but I wanted to get the information out as quickly as possible, as I am concerned the use of the tip won't work as widespread as first thought.

We are working with the regulator to get full watertight information by lunchtime on Thursday 24 March and we will update this guide then, but let me tell you what I think it's looking like so far.

Provisional findings (need final confirmation)

Again, remember this is not locked down information right now…

• This 'max top-up tip' will NOT work with Scottish Power and E.on. Both companies say it won't work. You will pay the new rates from 1 April even if you don't top up until later. Scottish Power has said it will simply clawback the money via the meter at that point, E.on hasn't specified how it'd get the money back.
  
  The regulator has told us there is likely to be nothing in the licence conditions that prevents firms from doing this. So we must work on the assumption that it is correct.
  
  
• The 'max top-up tip' is likely to work for other major suppliers' ELECTRICITY meters. We had double confirmed with all other suppliers that the tip would work.
  
  We have not heard from them since to change that information. Though in light of the new details, we will go back and confirm again by Thursday (in conjunction with the regulator if possible).
  
  British Gas though has tweeted that the tip will work for its non-smart prepay customers.
  
  
• It is unlikely to work for GAS with any supplier. This is new technical information told to us today by the regulator, on the back of our Scottish Power complaint.
  
  While all suppliers (barring Scottish Power and more recently E.on) have confirmed that the rate that applies is the rate on your last top-up, it seems there is a technical gremlin that means it won't in practice.
  
  Gas meters are made by Siemens, and while they don't record what the date of usage is, the key or card that people use to top them up can be preloaded with both current and new prices in advance of 1 April. Which means that on 1 April, the rate the meter charges for gas can change even without them being topped up.
  
  So my current best guess is suppliers will do those arrangements. Therefore this won't work for gas meters, even though firms haven't told us this.

So should you be doing a max top-up now?

No. Please wait until Thursday, when I hope we can give you cast-iron information on this.

If you've already topped up – and it doesn't work on your meter – is it a huge mistake?

No. You just won't save any money from it. You won't pay any more because of it, you'll simply start paying the new rates from 1 April as you would've done anyway, so there is no net cost.

The issue will be if you scraped every penny together to top up and you're now short of short-term cash, you would've done that for nothing.

I'm really sorry about this

My team and I have been rigorously researching this. And we checked the answers from suppliers and the regulator before giving the information out. We checked again before I gave it out in my show, asking suppliers to confirm it was correct, and asking the regulator to give us confirmation in writing.

I'm gutted to have now discovered that in some cases that information was duff. On behalf of both me and MSE, I'm sorry. Diligent research is what we pride ourselves on.

As one of the external information providers said to me off the record: "We are in unprecedented times right now, everyone is firefighting. This is a more complex issue than any of us thought, and in these times no one clocked the extra elements."

GingerTim

From the Bulb forum: https://community.bulb.co.uk/t/prepay-meter-stockpiling-before-1st-april/107083/1

Adviceuk3

The whole industry is a mockery that some suppliers will charge and others not?

How on earth is a customer supposed to know this when choosing a supplier?

It stinks all of it and makes you wonder who is ripping the consumer off nor not.

No doubt useless ofgem will report back on Thursday and say it's down to each supplier what they charge. But legally I don't know how the ones that do charge legally get away with I'll when you have prepaid your account with electric purchased on a certain date.

GingerTim

Adviceuk3 said:

The whole industry is a mockery that some suppliers will charge and others not?

How on earth is a customer supposed to know this when choosing a supplier?

It stinks all of it and makes you wonder who is ripping the consumer off nor not.

No doubt useless ofgem will report back on Thursday and say it's down to each supplier what they charge. But legally I don't know how the ones that do charge legally get away with I'll when you have prepaid your account with electric purchased on a certain date.

But if you topped up your meter today you haven't purchased electricity on 22 March - you have created a credit pool which you will use to pay for the electricity when you use it, at the price on the day you use it.

Hence the advice from MSE being described as a loophole - I was a bit worried about it being suggested as it was always going to be up to each supplier whether or not they would permit it.

MattMattMattUK

Adviceuk3 said:

The whole industry is a mockery that some suppliers will charge and others not?

It is more that some suppliers have legacy systems which allow some people to game the system and others do not.

Adviceuk3 said:

How on earth is a customer supposed to know this when choosing a supplier?

They are not, this situation was not anticipated, nor is this supposed to be part of energy supply or supplier choice.

Adviceuk3 said:

It stinks all of it and makes you wonder who is ripping the consumer off nor not.

I do not see how a global energy shortage causing prices to rise "stinks", nor is it a rip off. 

Adviceuk3 said:

No doubt useless ofgem will report back on Thursday and say it's down to each supplier what they charge. 

Ofgem has already said that the new rates apply from the first of April, however due to some supplier's legacy systems some customers may benefit by the implementation of price changes not taking place until some time later on prepayment meters.

Adviceuk3 said:

But legally I don't know how the ones that do charge legally get away with I'll when you have prepaid your account with electric purchased on a certain date.

It is entirely legal, you do not purchase electricity on a certain date with a prepayment meter, you add credit.