Dealing with Debt on Prepayment Meters
For Tenants, Homeowners, and Landlords in the United Kingdom,

This page provides  UK guidance on the causes, management, and repayment of debt on prepayment energy meters. It applies to tenants, homeowners, and landlords using prepayment meters for electricity or gas, particularly where arrears have built up due to credit shortfalls, emergency usage, or underpayment.

Prepayment meters operate on a pay-as-you-go basis. However, energy debt can still occur, and when it does, suppliers apply regulated recovery methods to ensure continued supply and manageable repayment. This process is overseen by Ofgem, the UK energy regulator.

How Debt Accumulates on Prepayment Meters

Even on a pay-as-you-go basis, debt may arise under the following conditions:

  • Emergency credit is used and not repaid
  • Friendly credit (given overnight or weekends) is applied automatically
  • Standing charges continue to accrue even when no credit is added
  • Missed or underpaid top-ups for a previously agreed debt repayment
  • Meter error or delayed billing correction applied to the meter

Once debt exists, it is recovered through automatic deductions from future top-ups unless otherwise agreed with your supplier.

How Repayment Works

Energy suppliers will recover debt by deducting a set amount from each top-up you make. The deduction is known as the weekly debt recovery rate.

Example:
If your debt deduction is £3 per week, and you top up £10, only £7 will be available for energy credit.

Repayment is structured to be affordable and must be discussed with you in advance. You can request to review or adjust this rate at any time.

Agreeing a Repayment Rate

Your supplier must assess your ability to pay before setting a repayment rate. This includes:

  • Income and essential living costs
  • Whether you receive benefits
  • Additional needs or vulnerabilities

Suppliers are required to follow Ofgem’s Ability to Pay Principles, which include offering realistic, fair repayment arrangements and reassessing them if your circumstances change.

Switching with Debt on Prepayment

You can switch energy suppliers with up to £500 of debt per fuel (gas and electricity) through the Debt Assignment Protocol (DAP).

To switch:

  • Your current supplier must confirm the debt amount
  • The new supplier must agree to take on the debt

This allows customers to access better tariffs while continuing to repay existing debt.

Understanding Emergency and Friendly Credit

Prepayment meters are equipped with safety-net credit features, including:

  • Emergency credit: Activated when your balance runs low
  • Friendly credit: Automatically applied during evenings, weekends, or holidays to avoid loss of supply
  • Additional support credit: May be available for customers in financial difficulty

All credit used through these functions becomes part of your repayable debt and is deducted from subsequent top-ups.

Emergency and Friendly Credit

Prepayment meters are equipped with safety-net credit features, including:

  • Emergency credit: Activated when your balance runs low
  • Friendly credit: Automatically applied during evenings, weekends, or holidays to avoid loss of supply
  • Additional support credit: May be available for customers in financial difficulty

All credit used through these functions becomes part of your repayable debt and is deducted from subsequent top-ups.

Landlords and Tenants

  • Tenants are responsible for energy debt only if the account is in their name
  • Landlords should not charge tenants for previous occupants’ energy debts
  • When a tenant leaves, suppliers can reset the meter to remove prior debt, with landlord cooperation

Landlords should ensure the supplier is notified of any tenancy changes.

Priority Services Register (PSR)

If you are:

  • Disabled
  • Chronically ill
  • Of pensionable age
  • A parent with young children
  • Using medical equipment powered by electricity

You should register for the Priority Services Register. This free support service helps protect vulnerable households from inappropriate enforcement or disconnection and ensures tailored assistance.

To manage or resolve debt on your prepayment meter:

  1. Check your meter display for active debt and repayment deductions
  2. Contact your supplier to confirm the total debt and current repayment rate
  3. Request a new repayment plan if the current rate is unaffordable
  4. Explore financial support through hardship grants or energy charities
  5. Register for the Priority Services Register if your household is considered vulnerable
  6. Contact an independent advice service if you need help negotiating with your supplier

If your case cannot be resolved through your supplier’s complaints process, you can escalate it to the Energy Ombudsman after 8 weeks or upon receiving a deadlock letter.