Any reason someone would CHOOSE to be on prepayment meters?

KxMx

As I said I wasn't offered a variable DD, only fixed when I registered my details with British Gas as the new tenant. 
There is someone else on the forum who has been told today by them, no variable DD if you have smart meters.
Which I have, but very old ones so they only connect to BG and not the wider network. 

QrizB

KxMx said:

My Aunt and Cousin stick with pre payment because they "don't want to be presented with a big bill" 
Even though they know that pre payment is absolutely the most expensive way to pay for energy use. 

Me, I'm happy with quarterly bills and setting aside money once a month ready for said bills, I tend to put away a higher amount October - March to cover the winter. 

@KxMx ou are mistaken. Some suppliers charge the same rates for all payment options.

Where they choose to set different tariffs:

• Prepayment standing charges are higher, by around 10p/day (gas) / 5p/day (elec). The unit rates are generally slightly lower.
  
• Paying by cash/cheque/card is *absolutely the most expensive way to pay for energy use*.

If you, your aunt and cousin were all in the same region and on the same tariff, you would probably paying more than they were.

For example see EDF's SVT rate card here:
https://www.edfenergy.com/sites/default/files/r505_deemed_rate_card.pdf

borderline

What_time_is_it said:

I suspect that lots of people are on prepayment meters who don't actually have to be. Would it be good general advice to encourage everyone on prepayment to get onto standard meters now if they can? Or are there genuine reasons why prepayment might be a better choice for some people?

I'm in rented accommodation, it's landlords choice , we are 3 flats all pre-pay. I guess easier for landlords so they don't have to worry about unpaid bills left by tenants 
I hate prepayment though .. aways keeping an eye how much you've got left and having to pop out to the shop to top up it's inconvenient and make sure there is enough credit left if you go away .. let alone it's more expensive than DD

Chrysalis

I have come to the thought that for those who cant budget prepay is better than fixed DD.  But the issue is limited choice of tariffs and the penalty costs of not been on DD?

The other potential problem of prepay is people stuck sitting in dark cold homes, and I think morally I have an issue with that.

wild666

Daughter has a prepayment meter but is always complaining what it's cost her. She's in for a shock in October as at present she's putting £70 per week on the electric and £30 per week on the gas. She's just bought a Ninja air fryer and cooks just about everything in that rather than using the gas cooker so will be saving on gas but using more electric.
It's what she chose when she got her first home and has had the meters for over 24 years.

stewie_griffin

KxMx said:

My Aunt and Cousin stick with pre payment because they "don't want to be presented with a big bill" 
Even though they know that pre payment is absolutely the most expensive way to pay for energy use. 

That’s not true. Paying on receipt of bill tends to be the most expensive although it varies by by supplier. This hasn’t been the case since the price cap was first introduced (it was brought in for prepayment meters first). 

macman

borderline said:

What_time_is_it said:

I suspect that lots of people are on prepayment meters who don't actually have to be. Would it be good general advice to encourage everyone on prepayment to get onto standard meters now if they can? Or are there genuine reasons why prepayment might be a better choice for some people?

I'm in rented accommodation, it's landlords choice , we are 3 flats all pre-pay. I guess easier for landlords so they don't have to worry about unpaid bills left by tenants 
I hate prepayment though .. aways keeping an eye how much you've got left and having to pop out to the shop to top up it's inconvenient and make sure there is enough credit left if you go away .. let alone it's more expensive than DD

You are free to move to a credit meter if you wish: the LL does not own the meter, and you are the bill payer.
However, you may have to pay for it to be switched back at end of tenancy.
This is far less of an issue in the era of smart meters, as no physical swap of meter is needed.

Bark01

In general this is what makes up the payment type differential:

Direct debit: Smaller debt risk than Credit
Credit: High debt risk, Credit customers have a much higher risk of running off and creating bad debt.
Prepayment: no debt risk, but a higher cost to serve 

Not all prepay tariffs are created equal:

Old world prepay card/token meters: Needs a whole third party industry to support charging keys/card which adds a considerable cost. The third party system has very limited space for tariffs so the number of tariffs in the market is greatly restricted and reduces competition. There's only enough space for most large suppliers to have ~5 tariffs in the market at any given time and this includes fixes that have customers on but are no longer on sale.

New world Smart meter prepay: The third party system is no longer needed as the suppliers can do it all themselves. The extra cost of using the third party system is removed and the restrictions in tariffs numbers is also gone.  However there is slight higher transactional cost when compared to credit as prepay customers tend to make more payments i.e. they pay a small amount weekly rather than a larger amount every month. They also a higher cost to serve as they 'should' recieve hyper care if there smart meter goes wrong.

In a nutshell Smart only prepay 'should' be in the region of direct debit pricing. It was starting to get there but the energy price issue has slowed development.

What_time_is_it

Can you get fixed rates if you are on prepayment?

elsien

Don't think so, no.