Prepayment Meter Customers Get Largest Drop in Energy Prices

After a rough year for many households, the cost of energy is finally coming down. Rates are still pretty high, but from July households will feel a bit of relief.

As always, rates will vary according to how you pay, however. So the NimbleFins team has looked into how gas and electric costs will improve in July across the different payment methods (i.e. direct debit, standard credit and prepayment meter).

Note: the figures in this article assume typical usage of:

First, here is a summary of the variable and standing rates from 1 July 2023 and the rates for the current period (April - June):

1 July 2023 - 30 September 2023 (EPC)

April 2023 - June 2023 (EPG)

As you can see, variable rates are coming down in July. Let's see how much!

Energy Price Changes

Traditionally, prepayment meter households have paid higher rates—a larger burden especially considering that the households using a prepayment meter (PPM) are often struggling more financially anyway. The good news for many is that these households are now getting a bigger drop in energy costs.

According to our analysis, PPM households will by paying 18.4% less for energy overall (that is, across gas and electric, including both variable and standing charges).

Standard credit households will pay 18.1% less and direct debit will pay 17% less.

In real money terms, these % drops are equivalent to annualised savings of around £445 for PPM, £467 for standard credit and £406 for direct debit.

As you can see, the biggest chunk of savings comes from an improvement in the cost of gas (electricity makes up a smaller proportion of the upcoming savings):

Next, let's dig deeper into the separate gas and electric components. Where will we see the most savings?

Gas Price Changes

Households will benefit from a larger drop in prices for gas (as opposed to electric)—both in % and actual £ terms. On average, we'll pay around 26% less for gas overall (i.e. standing + variable charges) from July. There's no change in daily standing charges, but variable charges (that is, what one pays per kWh of usage) are down significantly: down roughly 28% on average across payment methods.

Those on a prepayment meter will pay the cheapest rates and see the biggest drop in their bills. They'll pay around 27.1% less for gas (no change to standing charges; 30.1% less on variable charges).

% change to gas costs

That means PPM households will pay around £362 less for gas, on an annualised basis. Those on direct debit would pay around £320 less per year.

£ change to gas costs

Electric Price Changes

Electric costs are dropping as well, but less than gas costs. The variable (per kWh) rates are down around 10% on average across payment methods. In this case, however, it's those paying by standard credit who will get the biggest drop in rates (11.6% decrease in variable costs for standard credit). But we should point out that those on standard credit still pay the highest variable rates of anybody—and despite getting the largest % cut in rates, they are still paying the highest per kWh charge (30.2p/kWh).

% change to gas costs

£ change to gas costs