Smart Meter Compensation Scheme Launches with £40 Payouts
Households across England experiencing problems with their smart meters are now eligible for automatic compensation payments of £40 per issue. The new regulatory framework, announced by the energy regulator Ofgem on January 30, 2026, officially takes effect from Monday, 23 February 2026.
Eligibility Criteria for Automatic Compensation
The compensation scheme applies in several specific scenarios where smart meter performance falls short. Customers will automatically receive £40 from their energy supplier if they face delays exceeding six weeks for a smart meter installation appointment. Additionally, compensation is triggered when an installation appointment fails due to a fault within the supplier's control, or if a reported smart meter issue does not receive a resolution plan from the supplier within five working days.
Important Note: The £40 payout does not currently apply to meters that have reverted to 'dumb' mode and ceased transmitting readings to the supplier. This exclusion remains a point of discussion for future policy adjustments.
Background and Advocacy
The rule change follows sustained advocacy, notably from consumer champion and broadcaster Martin Lewis. In September 2024, Lewis formally requested the Labour Party's Energy Secretary, Ed Miliband, to address widespread smart meter malfunctions. Lewis highlighted that approximately one in five smart meters may not function correctly, undermining consumer confidence and the national rollout.
"Broken smart meters were high on the list of issues I raised with Ed Miliband when he first became Secretary of State," said the 52-year-old financial expert. "He promised me he'd investigate, so I was pleased when they told me this announcement was coming."
Regulatory Review and Future Plans
Ofgem has committed to reviewing these new compensation policies in early 2027 to assess their effectiveness in protecting consumer interests. The regulator also indicated it "intends to take forward further work" on the issue, with potential implementation later in the year. This ongoing review process aims to ensure the rules drive positive outcomes for households.
Martin Lewis welcomed the initiative as a step forward, emphasizing the need to shift energy firms' focus from mere installation to prompt repairs. "The aim of this plan is to improve service, and while it's taking a softer approach than we proposed, it is an improvement," he stated. Lewis also expressed support for the Government's adoption of a Consumer Charter, which will establish clearer rights and timelines for customers.
This compensation scheme represents a significant development in consumer protection within the energy sector, addressing long-standing grievances about smart meter reliability and supplier responsiveness.
