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Energy explained

Prepay energy customers are missing out on a fair deal: it’s time to switch and save

A picture of the Bulb prepay electricity card

We did some research into the prepay energy market and discovered that lots of people aren’t getting a good deal on their energy. More than one million homes who top up for energy are being overcharged by up to £200 on their energy bills every year. We’re encouraging people to switch for a fairer deal.

Our research shows that 1.6 million homes who prepay for their energy are paying up to £200 more for their energy each year than official watchdog figures show they should. Collectively, prepay energy customers in Britain unnecessarily lose out on £250 million every year. This is the kind of problem we started Bulb to fix, so we’re disappointed to see so many are getting an unfair deal on their energy. We shared our research with the press, who felt the same way.

Lots still pay more than they should for prepay energy

In 2016, the Competition and Markets Authority (CMA), an official government watchdog, looked at the cost difference between serving energy to homes with prepayment meters and those with credit meters. The CMA found this cost difference to be £63. It does cost suppliers more to supply energy to homes with prepay meters because the infrastructure that supports prepay energy is more complex. But after looking into it, we discovered some prepay customers are paying up to three times that amount.

For this research, we compared the cheapest prepayment tariff offered by the largest suppliers to their cheapest credit tariff for a typical home with standard energy consumption. We calculated the difference between these figures and compared it to the £63 difference which should exist according to the CMA. This shows that three suppliers are overcharging their prepay customers by up to £222 per year.

A table showing the annual bill for prepay energy customers at the Big Six suppliers
Source: uSwitch, data accessed 8th May 2019.

These suppliers represent 40% of the energy market. And as there are currently around 4 million homes on prepay meters in the UK, this means this overcharging affects 1.6m people. There really is no good reason why these suppliers are charging prepay customers so much more for their energy. We’d like to see all suppliers offer a fair tariff that reflects the true cost of energy.

You can switch to save

As you can see from the data, it’s not all bad news. Along with Bulb, Scottish Power, EDF and SSE all offer a fair deal on their energy for prepay customers. We’re proud to supply renewable energy to all our prepay members, and our tariff is one of the cheapest on the market. We’d like to see everyone do the same.

Interested in signing up to Bulb with a prepay meter? Find out more about Prepay (Pay As you Go)