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

Adviceuk3

So how does the customer know which suppliers have a legacy system in place against the ones that don't?

For all we know if everyone knew British gas allows this everyone would have had chance to switch to them.

GingerTim

Adviceuk3 said:

So how does the customer know which suppliers have a legacy system in place against the ones that don't?

For all we know if everyone knew British gas allows this everyone would have had chance to switch to them.

Given that almost every supplier isn't accepting switches except to eye-watering fixed tariffs, this seems academic.

MattMattMattUK

Adviceuk3 said:

So how does the customer know which suppliers have a legacy system in place against the ones that don't?

You do not, no supplier is going to advertise that their system allows you to use a loophole to lose them even more money than they are currently losing.

Adviceuk3 said:

For all we know if everyone knew British gas allows this everyone would have had chance to switch to them.

British Gas would likely not accept the switch as hardly any providers are allowing switches to SVRs at the moment, most are only accepting switches to fixed tariffs which are considerably higher.

GingerTim

Looks like MSE weren't able to get any concrete information yesterday, and have updated their existing advice  https://www.moneysavingexpert.com/news/2022/03/martin-lewis--warning-the--top-up-prepay-meters-before-april--tr/

Updated Thursday 24 March: What we know (and what we don't)

After a meeting this morning, sadly we don't have that cast iron info, and it's not going to happen. So let me take your through the three key points.

1. This 'max top-up tip' will NOT work with Scottish Power. This has always been the situation, and there is no change. 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 claw back the money via the meter at that point.

The regulator has told us there is nothing in the licence conditions that prevents firms from doing this. 

2. The 'max top-up tip' MAY work for other major suppliers' non-smart prepay ELECTRICITY meters. We originally had double-confirmed with all other suppliers that the tip would work – but after a meeting with the regulator, now we're hearing that a common position is "it will work, but if it costs them too much money, they reserve the right to back charge on this".

And that's as good as it gets, different firms have different attitudes. I think it's most likely to work with British Gas (which tweeted it would), Octopus, Shell Energy and Bulb, which have been pretty clear to us that they currently don't plan to claw back the extra, though none promise it. It's least likely to work with E.on, which backtracked on its original answer, although it now seems to have softened. 

Should you still try the top-up tip?

If your firm allows it to happen, you’ll keep the current price well into April and possibly beyond, depending how much you top up – effectively cutting a third off your energy costs, which can be substantial.

If it decides not to allow it you'll be using energy at the new rates from 1 April as you would've done anyway, so there is no net extra cost – there’s just no gain.  

The big consideration is cash flow. As you’ll need to find the cash now rather than pay later when needed – if that’s a big issue don’t do it (or only do a moderate amount).

How to try this as safely as possible

• Take a photo of your meter reading on 31 March. If you top up on, say, 25 March and don’t do it again until 16 April – hopefully you’ll pay the cheap rate until then. If not, and the firm decides it will charge the new rate from 1 April, it will likely estimate how much of your usage over the period was at the higher rate, as meters don’t usually keep day-by-day records.
  
  So photograph the meter reading on 31 March, and email it to yourself with a date stamp, so if the firm estimates too much, you can counter it.
  
  
• Be prepared that future units may be used quickly. In practice, you will in most cases continue to pay the cheap rate until you top up again. The key question is what happens then. The firm could argue you owe it the difference.
  
  Scottish Power, the only firm that will definitely claim back this difference, says it will do it by charging a special “debt recovery rate” to the meter until it recovers what is owed. 
  
  If others follow suit, you need to be prepared for that to happen (again in total you will pay the same, this is all about cash flow) as it will mean you see credit on your meter used up quicker than otherwise.
  
  The other possible option (they haven’t said it but it seems possible) is they could send you a bill for the difference in future. 

3. It is unlikely to work for GAS with any supplier. We were told new technical information by the regulator on Tuesday 22 March, on the back of our Scottish Power complaint.

While all suppliers (barring Scottish Power and more recently E.on) had confirmed to us 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 it is very unlikely to work on gas meters – though Octopus has told us it isn't increasing its price for prepay customers until 21 April anyway, with the new rate info sent to the top-up key or cards two to three weeks before that, so you may still be able to top up before then. 

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. The fact is on gas meters – it seems no one had worked out that it couldn't work (we've had apologies from some firms that told us it would). 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."

What does Ofgem say?

Ofgem told my team that this was more complex than it originally thought, and it has now spoken to suppliers to get to the bottom of the matter and provided the following clarification.

A spokesperson said: "This is a complex area. Suppliers can have different approaches, but we expect them to treat their customers fairly, be transparent about how their charges for consumption are calculated, and take account of customer ability to pay. Customers should speak to their supplier to understand how they may be affected."

MWT

Not really a huge surprise though as this has always been about motivation...

Previously it hasn't been worth the time to track and calculate the difference for the few who did it, but if you make it a national issue and encourage everyone to do it then it becomes necessary to react...

The clarification on the gas meter situation is news though and something to remember for the future.

GingerTim

MWT said:

Not really a huge surprise though as this has always been about motivation...

Previously it hasn't been worth the time to track and calculate the difference for the few who did it, but if you make it a national issue and encourage everyone to do it then it becomes necessary to react...

The clarification on the gas meter situation is news though and something to remember for the future.

Completely agree - loud proclamations about the loophole were only going to bring the energy companies' attention to it.

Henno

Does anyone know or has had any information back from Boost? They are an OVO company for the pre-payment side i believe.

I contacted them but all i got was "we currently cannot confirm the information you have as OFGEM has not sent it to us"

doesntnotcompute

Well I'm doing it!

I'm with British Gas so with what they've said on twitter and on here, along with Ofgem's quote above about expecting supplier's to be fair and transparent etc - this gives me enough confidence to do it.

My electricity meter definitely holds £255 (maybe it's £255.99 I heard somewhere) so topping up to that amount today. Then I'm gonna top up my key for I presume another £255 (I know my key holds at least £200 for sure). I believe the key has to be updated in chunks of £49 but the maximum the key can hold is definitely more.

Any problems I'll take it up with Ofgem.

Who's with me?(!)

wakeupalarm

I think that statement is pretty clear.  It will work, but if too many do it then they may claw back.
You have nothing to lose in trying it, remember only a tiny proportion of customers will do this anyway so I can't see the energy companies, with the exceptions mentioned above, clawing it back.

CashFunny

I managed to get £120.00 on both gas and electricity meters by 31 March.  On 1 April, I checked the gas meter and saw the tariff had been updated to the higher charge (as described in the article).  However the electricity meter remained at the lower tariff. 

I am with SSE for both gas/electricity, and am classified as a low user.  I checked my contract and there seems to be a clause that allows permits them to claim the difference:

13.1 You must top up your meter in advance in order to receive energy from us.  You need to keep your meter topped up to cover your energy charges and any other charges you might owe us (see section 5.2 ‘What other charges might you have to pay?’). If at anytime you pay an amount that’s less than the charges that are due to us, you must pay us the difference. We may collect any difference by adjusting your prepayment meter, unless you agree to make a one-off payment to us. Your meter also needs to be topped up to receive our electronic updates.  Note that you might have to buy a minimum amount of credit each time you top up. 

Source: https://sse.co.uk/asset/pdf/general-terms-conditions-supply-electricity-gas (page 26)

I guess I'll wait to see what happens.