PAYG smart meter debt is more manageable than most customers realise. Your supplier has obligations — and options they rarely advertise. Here’s what you’re entitled to ask for.
How Debt Ends Up on a PAYG Smart Meter
Debt appears on a PAYG smart meter in several ways. The most common are:
- A catch-up charge applied when you switched to PAYG from a credit meter
- Energy used during a period when your account wasn’t set up properly — for example when moving into a property
- Standing charges that accumulated when you couldn’t top up
- A balance carried over from a previous account
Whatever the reason — the debt is there and the meter is collecting it. Every time you top up, a portion goes toward the debt before any credit reaches your meter for energy use.
That’s why customers sometimes top up £20 and feel like it disappears. It isn’t going on energy. It’s clearing debt first.
What Most Customers Don’t Know
Your supplier does not want your debt to grow. An unmanageable debt that keeps rising is a problem for them too.
This means there is more flexibility in the system than most customers realise — but you have to ask for it. It rarely gets offered automatically.
Option 1 — Switching to Credit Mode
If you are in serious financial difficulty, your supplier can switch your smart meter from PAYG mode to credit mode remotely. No engineer visit required. This can happen the same day you call.
In credit mode you receive energy supply without needing to top up in advance. A repayment plan is then agreed for the debt.
This isn’t widely advertised. But it exists and you are entitled to ask for it.
What to say to your supplier:
“I am in financial difficulty and I am struggling to maintain my energy supply. I would like to request that my meter is switched to credit mode while we agree a manageable repayment plan for my outstanding debt.”
Option 2 — Negotiating Your Repayment Rate
If you stay on PAYG, your supplier will set a weekly debt repayment rate that is collected automatically when you top up.
What most customers don’t know is that this rate is not fixed. If you cannot afford the standard repayment rate on top of your usage costs, you can ask for it to be reduced.
Suppliers are required by Ofgem to ensure repayment rates are affordable and reflect your individual circumstances. In cases of genuine hardship, rates can be reduced significantly — sometimes to a level where covering your ongoing usage is the priority and debt repayment is minimal while your situation stabilises.
What to say to your supplier:
“The current debt repayment rate is more than I can afford alongside my usage costs. I would like to request a review of my repayment rate based on my current financial circumstances. I understand this may require authorisation but I am asking you to consider reducing it to a level I can sustainably manage.”
Option 3 — Debt Relief Under the New 2026 Scheme
If your debt built up between April 2022 and March 2024 — the energy crisis period — you may be eligible for debt write-off under Ofgem’s new Debt Relief Scheme.
Phase 1 launched in early 2026 and targets customers in receipt of means tested benefits including:
- Universal Credit
- Housing Benefit
- Income Support
- Pension Credit
- Income-related ESA
- Income-based JSA
If you are in receipt of any of these benefits and have energy debt from that period, your supplier should be contacting you. If they haven’t — contact them and ask specifically about the Debt Relief Scheme.
Phase 2 launches Summer 2026 and will cover customers not identified in Phase 1, using an income and expenditure assessment.
→ Your New Smart Meter Rights 2026
The Priority Services Register
If you are struggling with energy debt, ask your supplier to add you to the Priority Services Register. This is a free service that gives you additional protections including:
- Extra support if you self-disconnect
- A nominated person who can act on your behalf
- Advance notice before any action is taken on your account
- Access to specialist support teams
You don’t have to prove anything to get on the register. You just have to ask.
If Your Supplier Won’t Help
If you have asked for a reduced repayment rate or a switch to credit mode and your supplier has refused without properly considering your circumstances — that refusal may breach your Ofgem licence conditions.
Raise a formal complaint in writing. Reference that you have requested support under your supplier’s affordability obligations. Keep a record of every contact.
If the complaint isn’t resolved within 8 weeks you can take it to the Energy Ombudsman for free.
→ How the Energy Ombudsman Works
→ Generate your complaint letter — free
The Bottom Line
Debt on a PAYG smart meter feels like a wall. It doesn’t have to be.
Your supplier has tools available — credit mode switching, reduced repayment rates, debt relief schemes — that most customers never know to ask for. The Ofgem framework requires them to work with you.
Ask specifically. Ask in writing. And if they don’t respond properly — you know where to go next.
Written by a qualified UK smart meter installer with experience in energy debt resolution. Independent advice — not affiliated with any energy supplier. smartmeterhelp.co.uk