Why not pre-pay?

We pre-pay for our petrol, we pre-pay for our food and many of us pre-pay for our mobile phones - so why does pre-paying for energy have such a bad rap?

Utilita want to lift the stigma from prepayment energy - the vast majority of the UK population pay for their gas and electricity via direct debit, waiting for a bill every month which arrives after the energy has been used, making it very difficult to see what is being spent until a huge bill has been ‘racked-up’. Maybe this payment method is convenient but it also comes with its fair share of frustrations should the direct debits not go to plan.

We believe prepayment will find its place in a new energy-smart UK.

Smart metering, as with Internet shopping for retail, has the potential to change the market and customers’ experience of it, particularly in the case of prepayment energy. 19% of people in the UK use prepayment meters to pay for their energy and this number is expected to rise, furthermore a disproportionate number of prepayment meter users are on low incomes. 

The first thing we need to destroy is the antiquated view of prepayment meters - if you’re forced to go into a shop to top-up a key, before returning to your home to plug in and transfer your credit onto your meter (which may often be placed out of easy reach), then you’re with the wrong supplier. The prepayment energy service has evolved, it’s come a long way and it’s time to see its potential and look past its perceived reputation.

As part of a Consumer Focus (now Citizens Advice) study on prepayment smart metering in the UK, it was found that many felt there was an information gap related to smart prepayment options: “Technical solutions for smart prepayment are not as common as those for the post-paid sector; therefore, fewer reference models exist that can be drawn upon to help deliver benefit to the customer segment.*

Installing free, prepayment smart metering systems in the homes of every customer as part of our ‘Smart Energy’ service, we have over the past seven years learned first-hand what this market demographic need, but equally how it could be benefitting a much wider group.

Prepayment smart energy has the potential to address many of the issues that those using a traditional prepayment meter face.

The challenges associated with prepayment and lack of agreed solutions, mean that few suppliers are trialling pre-pay at scale, with the resulting impact that the more challenging pre-pay issues are not being identified or resolutions sufficiently prioritised. Therefore it is anticipated that pre-pay customers, as a customer group, will be the last to benefit from the smart meter rollout.

So what are the benefits?

1. A competitive prepayment tariff

The bedrock of our service is in offering a competitive tariff and developing user-friendly ways to ‘pay-as-you-go’. Specifically tailored to the needs of the prepayment market, we understand that people are being penalised on price when opting for a prepayment energy service over a traditional credit meter. We constantly monitor our rates across the nation to ensure our supply of energy is competitively priced and as low as wholesale and distribution costs will allow.

2. Control

A ‘hands-on’ pre-pay service - one that customers can easily understand and use to their advantage. We provide every customer with a free in-home display allowing them to view their credit balance and usage in real-time, helping them to budget for their energy at every step.

3. No more loss of supply

We understand a factor contributing to the stigma around prepayment energy is the fear that customers could lose supply easily compared with a meter in credit mode. To combat this, we give every customer access to ‘Emergency’ and ‘Friendly Credit’, ensuring they do not lose power during evenings, weekends and bank holidays. The last thing we want is a household left without power and have developed an infrastructure to avoid this where possible.

4. Ease of use

 Trekking to the shop with a plug-in key to top-up a prepayment supply is archaic and offers the user little flexibility. We offer convenient payment methods such as online and SMS top-up options which meet the demands of modern life.

5. Responsive aftercare

We hold extended hours in which customers can reach a knowledgeable Care Team Advisor; we pride ourselves on offering comprehensive aftercare. The ‘Big Six’ aren’t built to cater for this demand, with the infrastructure of larger energy companies based upon serving credit users alone.

 There are over 9.6 million households in the UK on a prepayment supply but the energy market is still dominated by the ‘Big Six’. Utilita are pleased to be offering a service tailored to the needs of this market - with over a decade of prepayment experience and over 200,000 prepayment customers, we believe in the future of prepayment energy and the benefits it can, and will, deliver.

*http://www.consumerfocus.org.uk/files/2013/03/Smart-Metering-Prepayment-in-Great-Britain.pdf (Consumer Focus now Citizens Advice)