Households across the United Kingdom will automatically receive £40 compensation payments for issues with their smart meters, starting today, February 23, 2026, under fresh regulations designed to accelerate the rollout and improve the functionality of the devices.
The automatic payments will be triggered in three specific scenarios, according to guidance issued by energy regulator Ofgem. Consumers will be eligible for the £40 credit if a smart meter installation appointment is scheduled but fails due to a fault originating with the energy supplier. A delay of more than six weeks in scheduling a smart meter installation will also qualify for the automatic payment. Finally, households will receive compensation if they report a problem with their smart meter but do not receive a resolution plan from their supplier within five working days.
The new rules represent a significant shift in responsibility, moving away from a system where consumers had to actively pursue compensation from energy firms. Melissa Giordano, deputy director of systems and processes at Ofgem, stated that the regulations aim to “set clear expectations of suppliers, drive better performance, and protect consumers when things go wrong.” She also emphasized the benefits of smart meters, noting they “offer customers accurate bills, cheaper tariffs, and real-time energy use tracking.”
The rollout of smart meters has faced challenges, with reports of malfunctioning devices and slow installation rates. Ofgem confirmed that over 900,000 previously non-operating smart meters have been repaired or replaced since 2024, indicating a concerted effort to address existing issues. However, concerns remain about the overall effectiveness of the program, with some estimates suggesting that as many as one in five smart meters are not functioning as intended.
The timing of the new regulations coincides with anticipated declines in energy bills. Cornwall Insight currently predicts that the Ofgem price cap will decrease from £1,758 per year to £1,641 for a typical dual fuel household. Ofgem is scheduled to announce its next price cap on February 25, which will be in effect from April 1 to June 30. The price cap limits the amount energy suppliers can charge per unit of gas and electricity, as well as daily standing charges, but does not cap overall energy consumption costs.
The regulations apply to households on standard variable rate (SVR) tariffs, meaning those not currently locked into fixed-rate energy deals. The compensation payments will be credited directly to customers’ energy accounts or bank accounts, according to Consumer Voice.