MARTIN Lewis has warned millions of households that a prepayment top up trick might not work for them.
The MoneySavingExpert founder had previously urged customers with old prepayment meters to buy more energy before prices soar from April 1.
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But it has since emerged that the trick won’t work every time, including with gas meters and with some suppliers.
The energy price cap will go up on April 1, meaning suppliers can charge more for gas and electricity.
There are around 4million households who pay for their energy in advance using a prepayment meter, and they are facing higher costs than direct debit customers.
Average bills will go up by £708 a year from £1,309 to £2,017 due to soaring wholesale costs.
Meanwhile, direct debit customers will pay an extra £693 a year as the price cap rises to £1,971.
Prepayment meter customers are often on lower incomes or have struggled with debt.
Martin previously said that by topping up before the hike, you could continue to pay the lower rate until you buy more energy.
However, some suppliers have since said they will claim back the money.
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It also will only work for old-style electricity prepayment meters and not for gas customers.
“If you don’t have a smart meter, the long term logic has always been that it is the price on the day that you top up that counts,” Martin said in a video today.
He said all major energy suppliers, excluding Scottish Power, had previously confirmed the trick will work.
However, more information has been revealed, suggesting it may not be a helpful tip for millions of customers.
We explain everything you need to know about the top up trick, including when to avoid it.
Smart meters
The top up trick won’t work if you have a smart meter – it is only applicable to old prepayment meters.
Martin made this clear when he first revealed the tip.
If you have a smart meter you will pay the new rates from April, regardless of when you topped up.
That’s because the meter will automatically update its prices.
Gas meters
“Even if firms wanted to this is unlikely to work in practice on gas prepayment meters,” Martin said.
That’s because the top up key or card will have information on it about both the old and new price.
So gas meters will automatically change their price on April 1 and you will pay the new rate for energy used after that date.
“This simply wont work on gas meters,” he said.
E.On and Scottish Power customers
E.On and Scottish Power have both said they will recoup the money from customers who bulk buy ahead of the energy price cap rise.
That means that you’re unlikely to make a saving if you get your energy from either of these companies.
E.On previously said the trick would work but has since u-turned on the issue.
It’s not clear how E.On will reclaim the money but Martin said Scottish Power will add a debt charge to your meter until you’ve paid back the difference.
Should I top up before April 1 if I’m with a different supplier?
Other firms might allow you to save money by using the trick but they “reserve the right to claw back the extra savings” if it costs them too much.
Martin said it is “most likely” to work for British Gas, Shell Energy, Octopus and Bulb customers.
But you should contact your supplier directly to find out whether they will honour the old rates if you top up before April 1.
If you do end up having to pay the money back, you won’t end up paying more than you would have done.
You will just be charged the April 1 rate, the same as if you hadn’t bothered with the trick.
However, topping up with a lump sum could cause you cash flow issues as you won’t be able to spend the money on your top up key on other things.
So you should think carefully about how much you can afford to spend in one go and don’t leave yourself short.
If you chose to stockpile, make sure you don’t use more energy than you usually do as this could end up costing you more.
“If this works you’ll get cheaper prices in April. If it doesn’t work, you won’t get cheaper prices in April but you wouldn’t anyway if you didn’t do this,” Martin said.
“So there’s nothing lost and the savings could be substantial if it does work.”
But he added: “By doing this you’re locking money away now that you can’t have access to and putting it on your card or key.”
If you do decide to try the trick, make sure you take a picture of your meter with a time stamp on March 31.
That means if your supplier does try to claw back the money, you have evidence of how much energy you’ve actually used at the higher rate from April.
What should I do if I already topped up -but now know the trick won’t work?
Martin apologised to consumers who topped up but have now realised the trick won’t work for them.
It won’t cost you any more but if it is causing you cash flow problems you could ask your supplier for a partial refund.
What help is available if I’m struggling with my energy bills?
Your first step, if you’re struggling, should be to contact your energy supplier.
They may be able to change your payment plan or check if you’re eligible for their hardship fund.
For example, British Gas and Octopus have both set up funds to help customers who are struggling with their bills.
You should also check that you’re getting all the benefits you’re entitled to.
Use an online benefits calculator to make sure you’re not missing out on any extra cash.
Similarly, you can search for grants that can help you pay for gas and electricity bills.
There are government schemes available to help households pay for energy costs.
You might be eligible for the winter fuel allowance or cold weather payment if you already get other benefits.
But bear in mind that these schemes are closing soon.
The government recently extended the Household Support Fund so you should contact your council for more details on how to access that help
Finally, one of the best ways of saving money is to make your home more energy efficient.
Check if you can reduce your energy use with a simple trick such as putting foil behind your radiator.
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