Ofgem has fined British Gas £20 million after a three-year investigation found the supplier failed to identify vulnerable customers on prepayment meters and did not offer them adequate emergency credit. The penalty, one of the largest ever imposed on a single supplier, exposes a system that has left some of the poorest households without heat or light during winter.
As Utility Week reports, the probe covered 2018 to 2021, a period when British Gas forcibly installed prepayment meters in thousands of homes, sometimes without a warrant or proper assessment of the occupant’s medical needs.
Who qualifies, and who doesn’t
Ofgem rules require suppliers to offer emergency credit of at least £10 when a prepayment meter runs out. They must also allow customers to self-disconnect only as a last resort. British Gas failed on both counts, according to the regulator’s findings.
For homeowners, the key question is whether you or a household member qualifies as vulnerable. Ofgem defines vulnerability as anyone over 60, under 5, or with a long-term health condition that worsens in cold. If you fall into any of those groups, you can request a free meter swap to a credit meter, and the supplier must comply within 28 days.
The catch is that many households don’t know this right exists. Energy Saving Trust data suggests only one in five eligible households has ever asked for a swap. The £20m fine should serve as a signal: if you’re on a prepayment meter and struggling, call your supplier today.
What it costs a typical 3-bed semi
Prepayment meters are the most expensive way to pay for energy. Ofgem’s price cap for April to June 2025 sets the typical annual cost for a direct debit customer at £1,723. For a prepayment meter customer, that figure rises to roughly £1,850, a difference of about £127 per year.
That gap widens if you live in a poorly insulated home. A 3-bed semi with single glazing and no loft insulation could see bills exceeding £2,400 on a prepayment tariff. The fine does nothing to lower those costs directly, but it does put pressure on suppliers to treat prepayment customers fairly, and to offer the same tariffs available to direct debit households.
EPC impact: if you’re on a prepayment meter, your EPC rating is irrelevant to the tariff you pay. But improving your home’s efficiency, cavity wall insulation, loft top-up, double glazing, can cut your annual consumption by 25-30%, reducing the sting of the prepayment premium.
What this means for your rights
Ofgem’s investigation focused on British Gas, but the same rules apply to all suppliers. If you’ve been forced onto a prepayment meter without your consent, or if you’ve been denied emergency credit, you can file a complaint with the Energy Ombudsman.
The regulator has also tightened the rules since 2023. Suppliers now need a court warrant before installing a prepayment meter in a vulnerable household. They must also offer a repayment plan for debt before switching to prepayment mode.
Yet enforcement remains patchy. Ofgem’s own data shows that complaints about forced prepayment meter installations rose 40% in the last year. The British Gas fine is a warning, but it’s not a solution. Homeowners need to know their rights, and exercise them.
What to do by when
If you’re on a prepayment meter and think you qualify as vulnerable, call your supplier today. Ask for a free swap to a credit meter. If they refuse, contact the Energy Ombudsman within 12 months of the refusal.
If you’re not vulnerable but want to switch to a cheaper tariff, check comparison sites for prepayment meter deals. Some suppliers now offer smart prepayment tariffs that let you top up via app, and avoid the standing charge premium.
Finally, consider a smart meter. Smart meters in prepayment mode give you real-time usage data, so you can budget better and avoid unexpected disconnections. Ofgem says smart prepayment meters reduce self-disconnections by 60% compared to traditional key meters.
Frequently Asked Questions
Yes, if you qualify as vulnerable under Ofgem rules, over 60, under 5, or with a long-term health condition. Your supplier must swap you within 28 days. If you don't qualify, you may still be able to switch, but the supplier can charge a fee (typically £50-£150).
No. The £20m goes to Ofgem's consolidated fund, not to individual customers. If you were affected by British Gas's failings, you can file a complaint directly with the supplier or the Energy Ombudsman for compensation, typically £30-£150 per incident.
