As of 1 November, gas and electricity prepayment meter customers who are up to £500 in debt with their current supplier will be allowed to switch to a cheaper rival.
Currently, only prepayment meter customers with debts of up to £200 on their machine can switch suppliers.
But the big six gas and electricity firms in the UK - British Gas, SSE, Scottish Power, EDF, E.ON and npower - have agreed to increase this debt limit from 1 November.
Energy regulator Ofgem says this move will allow tens of thousands more prepayment meter consumers in debt to choose the cheapest energy deal by switching gas and electricity supplier.
Prepay customers pay more
Prepayment meter customers are typically charged more for their gas and electricity than customers who pay by monthly direct debit.
The average annual bill for a prepayment meter customer on a dual fuel tariff (where you have gas and electricity from the same firm) is £1,306, compared to £1,222 for customers paying by monthly direct debit.
This is according to research by consumer watchdog Consumer Focus and these figures take into account the latest gas and electricity price rises.
So the ability to switch to a cheaper supplier is of particular importance to prepayment meter customers.
Brits cut back on heating
Research from Consumer Focus shows that shows more than 6 million households in England plan to cut back on heating this winter because they are worried they will not be able to afford their bills.
Sarah Harrison from Ofgem said: "We are acutely aware of the increasing financial pressures faced by many consumers, particularly those who are in the most vulnerable circumstances.
"Ofgem remains determined to ensure suppliers continue to focus on helping consumers manage their energy bills and reduce their debt."
Winter price rises
Customers of SSE – which owns Swalec, Southern Electric, Atlantic and Scottish Hydro – were hit with a 9 per cent average price rise as of 15 October.
British Gas customers face a 6 per cent average price that will add around £80 to annual bills as of 16 November.
Npower's prices will rise by 8.9 per cent on average, adding £109 to annual bills, on 26 November.
And Scottish Power customers will see a 7 per cent average rise on their annual bills from 3 December.
How to switch supplier
Using an online comparison site to switch gas and electricity? You’ll be asked to enter your postcode and details of your current gas and electricity supplier, including the name of your tariff. You should be able to find the name of your tariff on a bill but if not give your current supplier a call and ask. There are hundreds to tariffs on the market so it pays to enter the correct tariff so you get the most accurate price comparison.
You’ll be asked to enter your annual spend on your bill, or your annual usage. For the most accurate price comparison, enter your usage. You can find this out by calling your current supplier and asking for your usage for the past 12 months, in kilowatt hours (kWh).
If you don’t know your usage – if you’ve recently moved into a new property, for example – you’ll be asked if you’re a low, medium or high energy user. Find out what category you fall into.
The search results will show you the cheapest deals for dual fuel, as well as the cheapest deals for gas and electricity separately. It’s worth checking out the cost of separate deals as while duel fuel is often cheaper, this is not always the case.
You’re also able to enter how you’d like to pay your bill. It is almost always cheaper to pay by direct debit. Energy firms claim this is because the payment is cheaper to process but the fact is that if you pay by direct debit then your payment is guaranteed, unlike paying on receipt of bill by cash or cheque. So suppliers are happy to offer discounts for customers who pay this way.