Are prepayment meter tariffs cheaper than paying by Direct Debit?

Not usually. In the UK, Direct Debit tariffs are often priced lower than prepayment (PAYG) tariffs because they’re cheaper for suppliers to manage. However, the best option depends on your supplier, region, meter type and how you pay. If you want to check whether switching payment method could reduce your bill, compare current tariffs and total annual cost (unit rate + standing charge) for both options before changing.

Why are prepayment meter (PAYG) tariffs often more expensive?

Prepayment tariffs can be higher due to extra operational costs (top-up systems, debt management and meter administration) and because PAYG customers have historically been considered higher-risk. Always compare the full tariff details—unit rates and standing charges—rather than looking at only one price component.

Can a smart prepayment meter be cheaper than a traditional prepayment meter?

Sometimes. Smart PAYG meters can offer more convenient top-ups and access to a broader range of tariffs with some suppliers, but they’re not automatically cheaper. The price still depends on the specific tariff (unit rate and standing charge) available to your address and meter configuration.

What costs should I compare between prepayment and Direct Debit tariffs?

Compare (1) the electricity and/or gas unit rate (p/kWh), (2) the standing charge (p/day), and (3) your estimated annual usage to calculate the total yearly cost. Also factor in any payment discounts, any debt repayment rate on a prepayment meter, and whether prices are fixed or variable.

Is it cheaper to switch from prepayment to Direct Debit?

It can be. Moving from prepayment to Direct Debit may unlock lower-priced tariffs with some suppliers. If you’re eligible, ask your supplier about changing your payment method and meter type, then compare the total cost before committing. You can also compare suppliers to see whether switching provider offers better value on Direct Debit.

Can I change from a prepayment meter to a credit meter?

In many cases, yes—subject to supplier checks and any outstanding debt arrangements. Some suppliers may request a security deposit or set conditions before changing the meter. If you want to explore your options, speak to your current supplier or compare deals and availability for your address.

Do prepayment customers pay a standing charge?

Yes, most prepayment tariffs include a standing charge. Depending on your meter setup, it may be taken daily from your credit or recovered when you top up. Always check the standing charge amount when comparing PAYG vs Direct Debit tariffs.

What if I’m on a prepayment meter because of previous debt?

If debt is being repaid through the meter, your top-ups may be partially used for repayment, increasing your effective cost. Ask your supplier what repayment rate is set and whether it can be reviewed. You can still compare tariffs, but make sure you separate tariff costs from any debt recovery amount.

How can I find the cheapest option for my home?

The cheapest option depends on your usage and tariff availability. Compare the total annual cost for prepayment versus Direct Debit (unit rate + standing charge), then check if switching payment method, meter type, or supplier would reduce your bill. Start by comparing energy deals for your postcode at https://www.energyplus.co.uk/.

Are prepayment meter tariffs cheaper than Direct Debit?

Compare whole-of-market UK home energy deals and see whether a prepay meter or Direct Debit works out cheaper for your household. Get tailored results in minutes.

Clear, UK-focused guidance on prepay vs Direct Debit pricing
Check what you could pay on your current usage and meter type
Switch support even if you need a smart prepay option
No jargon—just straightforward comparisons for your home

Compare tariffs & get a quote How prepay vs DD works

Information is for UK domestic customers. Results depend on your region, usage, meter type and available tariffs.

Compare prepayment meter and Direct Debit tariffs for your home

Whether a prepayment (PAYG) meter is cheaper than paying by Direct Debit depends on your region, usage, current meter setup (standard or smart prepay), and which suppliers are open to your circumstances. EnergyPlus compares whole-of-market UK home energy deals to help you find the best available option.

Good to know: Under the Ofgem price cap, there are limits on how much suppliers can charge typical households, but your real bills depend on unit rates and standing charges where you live and how you use energy.

If you’re not sure what meter you have, don’t worry—enter what you know and we’ll guide you.

What you’ll need (takes 2 minutes)

Your postcode (rates vary by region)
Any recent bill or top-up info (optional, but helps accuracy)
Whether you want gas, electricity, or both

So, are prepayment meter tariffs cheaper than Direct Debit?

In most cases, Direct Debit has historically been cheaper than traditional prepayment, because some suppliers priced prepay higher and offered fewer discounts. However, changes to regulation and the move to smart prepayment mean the gap can be smaller than it used to be—and in some situations, a competitive prepay tariff can be close to (or occasionally beat) a poor-value Direct Debit tariff.

What matters most

Unit rate (p/kWh) and standing charge (p/day) for your region
Whether you’re on a smart prepay tariff (often better than legacy PAYG)
Your usage pattern (e.g., electric heating, larger family, working from home)
Any debt repayment being taken from top-ups (this affects what you can spend)

If your goal is simply “the cheapest way to pay”, you’ll get the most accurate answer by comparing tariffs available to your postcode and meter type rather than relying on averages.

Prepayment vs Direct Debit: advantages and drawbacks

Direct Debit: often best value

Typically wider choice of tariffs
Easier to access online-only deals
Payments spread across the year (helpful in winter)

Prepayment: more control

Pay as you go—good for budgeting
Smart prepay lets you top up online (with many suppliers)
Can help avoid large catch-up bills

Watch-outs (both)

Standing charge applies either way (most tariffs)
Prepay can risk self-disconnection if credit runs out
Direct Debit can build credit or debt balances depending on monthly set-up

Tip: If you’re on prepay and worried about running out of credit, ask your supplier about emergency credit, friendly-hours settings (where available), and whether a smart meter upgrade could improve your options.

How suppliers price prepayment vs Direct Debit

It’s not the payment method alone that makes a tariff cheaper or more expensive—it's the tariff structure your supplier assigns to that meter and payment type. Here’s what typically drives the difference in the UK:

Standing charges: These vary by region and can be higher or lower depending on tariff. A small difference (e.g., 5–15p/day) can add up over a year.
Unit rates: Prepay tariffs can sometimes have slightly different p/kWh pricing, particularly on legacy PAYG meters.
Discounts and eligibility: Some online or fixed deals are only offered to Direct Debit customers, though this varies by supplier and market conditions.
Smart prepay availability: Smart meters can unlock more competitive prepay options and easier top-ups.
Debt recovery on prepay: If you have an agreed repayment rate, part of your top-up can go towards debt, reducing what’s left for energy.

The pricing terms to check on any quote

Electricity unit rate (p/kWh)
Electricity standing charge (p/day)
Gas unit rate (p/kWh) (if applicable)
Gas standing charge (p/day)
Any exit fees on fixed tariffs

Typical cost differences (what to expect)

No two homes are identical, but the table below shows the kinds of differences that can make one payment method look “cheaper” than the other. Use it as a checklist when you compare quotes.

Factor	How it affects prepayment	How it affects Direct Debit
Standing charge level	If higher, you pay more even with low usage—can feel costly for small flats.	Same—standing charge hits regardless of usage; many DD tariffs compete here.
Unit rate level	Small changes matter most for higher users (families, electric heating).	Often competitive due to broader tariff availability and DD-only deals.
Meter type	Smart prepay can offer better rates and easier top-ups than legacy key/card.	Smart/standard credit meters typically have the widest access to tariffs.
Debt repayment settings	A portion of each top-up may go to debt, leaving less for energy usage.	Repayments are usually part of your monthly payment plan.
Budgeting and cashflow	You control spend, but prices still apply—running out of credit is a risk.	Smooths winter costs across the year; review your DD if it’s set too high.

Practical rule: If you can access a competitive Direct Debit tariff and manage monthly payments, it’s often the cheapest route. If Direct Debit isn’t suitable right now, comparing smart prepay tariffs can still reduce what you pay versus an expensive standard variable option.

Can you switch from prepayment to Direct Debit (or the other way round)?

Often, yes—but the path depends on your meter type and whether there’s any outstanding debt linked to the meter. Some households can switch payment method without changing the meter; others may need a meter exchange or a smart meter configuration change.

Switching to Direct Debit

You may need a credit meter or a smart meter set to credit mode
If there’s debt, you might be asked to agree a repayment plan
Suppliers often run affordability checks for payment plans

Staying on prepay but paying less

Ask about smart prepay (online/app top-ups)
Compare unit rates and standing charges in your region
Check for support schemes if you’re struggling with bills

Common mistakes that make comparisons inaccurate

Comparing monthly Direct Debit amounts instead of actual tariff rates (DD amounts can include credit building).
Ignoring standing charges—especially important for low users.
Not accounting for debt deductions on prepay (your top-up isn’t always your energy spend).
Assuming all prepay meters are the same (legacy key/card vs smart prepay differs).

Compare my tariffs Read FAQs

FAQs: prepayment meter tariffs vs Direct Debit

Is prepayment always more expensive in the UK?

Not always. Direct Debit has often been cheaper on average, but price caps and improved smart prepay offerings mean the difference can be smaller. The cheapest option for you depends on your region, usage, meter type and which tariffs you can access.

The most reliable way to check is to compare current rates (unit rates + standing charges) for your postcode.

Why does Direct Debit sometimes look more expensive each month?

Monthly Direct Debit amounts are often set to spread costs across the year, so you can build credit in summer to cover higher winter usage. That doesn’t necessarily mean the tariff is more expensive—check the unit rate and standing charge for a fair comparison.

Can I get a fixed tariff on prepayment?

Sometimes. Availability varies by supplier and may depend on whether you have smart prepay. If a fixed option isn’t available, you can still compare variable tariffs and look for the best rates in your area.

Does a smart meter make prepayment cheaper?

A smart meter doesn’t automatically reduce rates, but it can unlock access to smart prepay tariffs, simpler top-ups, and easier switching between credit and prepay modes with some suppliers. That flexibility can help you find better-value options.

What if I’m in debt—can I still switch supplier?

Potentially, yes. In many cases you can switch, but rules and supplier processes vary—particularly if the debt is linked to the meter. Comparing options can still be worthwhile, and you may be able to agree a repayment plan. If you’re struggling, ask about hardship support and speak to your supplier.

Trusted comparison support for UK households

Whole-of-market approach

Compare tariffs across a broad range of UK suppliers and filter by what fits your home and meter type.

Clear next steps

We focus on the rates that matter—unit rates and standing charges—so you can make a confident decision.

Helpful for prepay households

If you’re on PAYG, we’ll help you understand your options, including smart prepay where available.

“I didn’t realise the standing charge was the big difference. Comparing properly helped me choose the better option for my small flat.”

— EnergyPlus customer, UK

“We were on prepay and thought we had no choices. Seeing smart prepay options made it much easier to budget.”