Switching energy supplier with debt on a prepayment meter

Owing money on a prepayment meter does not automatically stop you changing energy supplier. Independent guidance is consistent that a switch is allowed if you have a prepayment meter and owe £500 or less to your current supplier¹. The same £500 figure appears across debt advice services and consumer organisations, and it is applied to each meter rather than to your total balance².

The debt does not vanish when you move. It transfers to the new supplier, and you repay it through the meter over an agreed period⁴. What changes is who you owe it to, not how much you owe.

Above £500 on a prepayment meter, a switch can be blocked². There is also a separate 28-day rule that applies to people paying by direct debit or on receipt of a bill: you have the right to switch if you have been in debt to your current supplier for less than 28 days⁵.

Prepayment debt limit for switching: under £500 per meter

The £500 threshold is the single most useful number to know. Debt advice services state that if you have a prepayment meter and owe £500 or less to your current supplier, a switch is allowed¹. Consumer organisations put the same rule in slightly different words: you can switch supplier and tariff as long as you have less than £500 of debt on your meter³.

The limit is applied per meter, not to your combined balance. Guidance for switchers spells this out: you can switch if you pay by topping up a prepayment meter and you have less than £500 debt for each meter, and you will repay that debt to your new supplier instead⁶. A household with a gas meter and an electricity meter is therefore assessed on each one separately. Owing £400 on gas and £400 on electricity is £800 in total, but neither meter is over the limit.

Two qualifications matter. First, the £500 rule is a floor, not a guarantee: smaller providers may set their own conditions³. Second, some suppliers impose extra requirements, such as holding a current account or having been debt free for at least three months⁷. Those conditions sit on top of the debt limit and can rule out a particular supplier even when your arrears are well under £500.

Your debt moves with you to the new supplier

Switching with prepayment debt is not a way of escaping it. The debt transfers to the new supplier, and the meter is set to recover it. Guidance for prepayment meter customers explains that the supplier will use part of your payments to pay off your debt over an agreed period⁸. The meter itself can be set to recover fuel debts as well as to pay for the gas or electricity you use⁹.

This is why the £500 limit exists. A new supplier is taking on a debt it did not create, recovered through a meter it now controls, so the rule caps how much it can be asked to absorb.

What does not transfer is your credit. If you switch to a new supplier, your credit will not usually be carried over from your old supplier, and your old supplier will refund your credit after you switch⁷. That refund is separate from the debt, and the two are not netted off against each other in the way people often assume.

The 28-day rule for customers in debt

The 28-day rule is the second limit, and it works differently from the £500 cap. You have the right to switch supplier if you have been in debt to your current supplier for less than 28 days⁵. The same right is set out in Welsh-language guidance for prepayment meter customers¹¹.

For people paying by direct debit or when they receive a bill, the rule is expressed as a restriction rather than a right: you can still switch if you have owed your supplier money for less than 28 days, and your debt will be added to your final bill⁶. Once arrears on a normal meter have been outstanding for over 28 days, the supplier can object to the switch².

The two rules overlap but are not the same. The 28-day rule is about how long the debt has existed. The £500 rule is about how much is owed on a prepayment meter. A prepayment customer with a long-standing balance under £500 falls inside the switching right; a direct debit customer whose arrears have run past 28 days does not.

When a new supplier can turn you down

The clearest statement of the risk is blunt: if you owe money to your energy supplier, you may not be accepted by a new supplier¹². That is the general position, and the £500 rule is the protection that sits underneath it for prepayment customers.

There are three distinct ways a switch can fail.

• The debt is over the limit. Arrears of more than £500 on a prepayment meter are a stated reason a switch can be refused².
• The 28-day period has passed on a normal meter. Arrears outstanding for over 28 days on a normal meter are also a stated restriction².
• The new supplier's own conditions are not met. Some suppliers require a current account, or a period of at least three months debt free⁷.

It is worth separating a refused switch from the supplier's other powers. Gas and electricity debts to your current suppliers are priority debts, because suppliers can disconnect your supply and can force you to have a prepayment meter if it is safe and reasonable¹³. Suppliers can also collect debt through a debt collection agency or get a court warrant to fit a prepayment meter¹⁵. Those powers apply to the supplier you are already with, and they are a different matter from whether a new supplier will take you on.

Where it is safe to install a prepayment meter, your supplier must ask you if you want one before your supply is cut off, and cannot insist on one if you have not fallen behind on an arrears repayment arrangement¹⁶. In extreme cases where no payment plan has been agreed, the supplier can install a prepayment meter without your consent, but this should be a last resort¹⁷.

How to switch with prepayment debt

The process is the same as any energy switch, with one extra step: confirming the debt position before you start.

1. Check the balance on each meter. The £500 limit applies per meter, so a gas balance and an electricity balance are counted separately⁶.
2. Check how long you have owed the money. If you have been in debt to your current supplier for less than 28 days, you have the right to switch⁵.
3. Apply to the new supplier. If you owe money, you may not be accepted, so it is worth knowing that before you commit¹².
4. Let the debt transfer. With a prepayment meter and less than £500 of debt for each meter, the debt moves to the new supplier and you repay it there⁶.
5. Claim any credit back. Your old supplier will refund your credit after you switch, as it is not usually carried over⁷.

If you rent, there is a separate point to check. You do not need your landlord's permission to switch from a prepayment meter to a credit meter, though you may have to change back to a prepayment meter before you move out¹⁸. If you want to switch to a prepayment meter, you must let your landlord know, or your deposit could be affected¹⁹.

Moving from a prepayment meter to a credit meter is easier if you already have a smart meter, and the process depends on your supplier²⁰. Consumer Scotland has argued that consumers should have an automatic right to switch away from prepayment meters, or smart prepayment mode, to credit once the debt on the meter has been cleared²¹. That is a stated position rather than a current right.

If you cannot access your prepayment meter, your supplier could move the meter to a more accessible position or change you to a smart meter, and a swipe card can automatically top up your meter when you make a payment⁵.

What happens if you owe more than £500

Above the limit, the practical task is to bring the balance down or agree a repayment arrangement. Non-payment can result in higher bills and affect your credit file, and your energy supplier could also look at fitting a prepayment meter or, if you have a smart meter, switching it to prepayment²².

The scale of prepayment debt is significant. Of 313 households on prepayment meters surveyed for one policy study, 50% had outstanding gas debts above £500²³. That is a small sample, but it shows how common balances above the switching limit are.

There are protections around how a supplier can recover debt through a meter. If a health condition or vulnerability prevented you from dealing with your energy debt, your supplier should not charge you for fitting a prepayment meter as a way of sorting out your debt¹. If a supplier fits a meter rather than disconnecting your supply, they may charge up to £150¹. Where a supplier gets a warrant to enter your home and install a meter, it can charge up to £150, added to your current debt, unless you have a good reason to refuse consent, and if you are vulnerable you may not have to pay it¹¹.

There are also timing protections. Electricity and gas suppliers will not compel customers in debt to move onto a prepayment meter over the Christmas period, unless the customer specifically requests it²⁴. That protection covered 16 December 2022 to 20 January 2023²⁴.

Where to get free help

Free, impartial help is available and does not cost anything. National Debtline publishes guidance on gas and electricity arrears for England and Wales and for Scotland¹. StepChange covers switching utility providers and common debt myths². Citizens Advice explains what happens when an energy supplier goes bust¹⁰.

For households in Northern Ireland, the Consumer Council sets out electricity and gas consumer protections, and Advice NI publishes the Consumer Energy Charter and cost of living arrears guidance²⁴. Shelter England and Shelter Cymru cover help with gas and electricity bills, avoiding disconnection, and prepayment meters¹⁸. Scope publishes advice on switching energy supplier and on prepayment meters, including for disabled households⁷. Age UK covers meters and debt³¹.

If a switch goes wrong, or a supplier refuses to let you move when you believe you are within the rules, a complaint can be taken to the Energy Ombudsman once the supplier's own complaints process has been used. For a wider dispute with a firm that has stalled, free consumer advice services can help.