If your smart meter has stopped working, stopped sending readings, or your supplier has failed to fix a fault, you may no longer have to argue for a goodwill payment. New Ofgem rules require energy suppliers to pay £40 in automatic compensation when they fail to meet specific service standards relating to smart meters.
That means if your supplier gets it wrong they must put it right and pay you for the inconvenience. Here’s what this means for you, when you qualify, and how to make sure you receive what you’re owed.
What’s changed under the new Ofgem rules?
For years, customers have complained about smart meters that go “dumb”, stop sending readings, or generate inaccurate bills, only to face long delays and inconsistent compensation.
Under the updated regulations (effective from 23 February 2026); suppliers must meet defined performance standards for smart meter faults and related issues. If they fail to meet those standards, they must pay you £40 automatically. The payment must be issued within a set timeframe and if they fail to pay on time, further compensation may become payable.
You shouldn’t have to fight for basic redress when your supplier fails to deliver the service required by regulation.
When are you entitled to the payment?
You may qualify for automatic compensation if your supplier fails to resolve certain smart meter issues within the required timeframe.
This can include situations where:
Your smart meter stops working properly
If your meter:
- Stops sending automatic readings,
- Reverts to estimated billing,
- Loses smart functionality after a supplier switch,
- Or develops a fault that your supplier fails to address within the required period
Your supplier fails to complete an agreed appointment
If a smart meter installation or repair appointment is missed, cancelled without adequate notice or not completed properly. This breaches the service standard, the £40 payment should be triggered automatically.
You’re left with ongoing billing issues caused by a smart meter fault
If you’ve been stuck on estimated bills because your supplier hasn’t fixed your smart meter, and they fail to resolve the issue in line with Ofgem’s timeframe, compensation may apply.
This is particularly relevant if you’ve repeatedly provided manual readings, you’ve contacted them multiple times or your account remains inaccurate because of their delay.
Prepayment smart meter faults
If you have a prepayment smart meter and a supplier failure leaves you unable to top up or manage your account correctly, and they fail to resolve it in time, this may also trigger automatic compensation. Prepayment customers are particularly vulnerable to disruption, and the rules recognise that.
Do you need to apply for the compensation?
The compensation is described as “automatic”, meaning your supplier should identify when they’ve breached the smart meter service standard. Credit or pay you £40 without you having to request it and issue the payment within the required timeframe.However, in practice, you should still monitor your account.
Be sure to keep records of; the date you reported the fault, confirmation emails or complaint references,appointment booking confirmations, screenshots of billing errors, any correspondence about delays. If the £40 does not appear you may need to prompt them.
What if the supplier doesn’t pay automatically?
If you believe your supplier has missed the required repair or response timeframe and you haven’t received compensation, you should raise a formal complaint in writing, stating the date you first reported the issue, referring specifically to the Ofgem automatic compensation rules effective 23 February 2026 and ask when the £40 payment will be issued. Be clear, factual and direct. You are asking for a regulatory payment, not a discretionary gesture.
It’s important to understand that the £40 payment covers the specific service failure. It does not prevent you from seeking additional compensation if the problem caused further harm.
You may still be entitled to further redress if:
- You were significantly overcharged.
- Billing errors caused financial hardship.
- Your credit file was negatively affected.
- You spent excessive time chasing the issue.
- Your complaint was mishandled or ignored.
- The problem continued for months.
In these cases, you can request additional compensation for distress and inconvenience on top of the automatic £40.
Remember, you have back-billing protection
If your smart meter stopped working and your supplier failed to fix it, leading to incorrect or delayed bills, you may also be protected by back-billing rules. In most circumstances suppliers cannot charge you for energy used more than 12 months ago if the failure to bill correctly was their fault. This is separate from the £40 compensation and can significantly reduce large catch-up bills caused by meter failures.
When to escalate to the Energy Ombudsman
You can take your complaint to the Energy Ombudsman if your supplier refuses to acknowledge the compensation, disputes your entitlement, fails to correct billing errors or does not resolve your complaint within 8 weeks.
The process is free to you and the Ombudsman has the power to order your supplier to:
- Pay the £40 compensation.
- Award additional compensation.
- Correct your billing.
- Issue an apology.
- Take practical action to resolve the meter issue.
Don’t accept smart meter failures
Smart meters were introduced to improve billing accuracy and reduce disputes. If yours has stopped working and your supplier hasn’t acted quickly, that’s not something you just have to accept. From 23 February 2026, the rules are clearer. If your energy supplier fails to meet required smart meter standards, you are entitled to £40 in automatic compensation.
And if that payment doesn’t arrive automatically, you have every right to challenge it.
You can use Resolver to document your case and if you feel like you’ve been misled, you can raise a complaint with Resolver