Thousands of energy customers are due to receive payouts of up to £1,000 each over the forced fitting of prepayment meters. Some debts will also be written off.

A total of £74million is being paid out by eight energy firms. This includes Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy and Ecotricity.

It comes after energy regulator launched an investigation into often vulnerable customers being switched to prepayment meters after they fell behind on bills.

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The payments start at £40, according to the , with the figure rising to £250 or £500 depending on the way the customer was treated by their supplier.

The maximum £1,000 payments will be awarded to households customers who faced "inappropriate installation". Ofgem has said the compensation will be paid automatically into energy accounts and added that some customers will have already been contacted by their supplier.

The energy firms at the centre of the investigation have already issued £55million in financial support. A further £5.6million will be paid in compensation to 40,000 affected customers., and another £13million will be used to write off energy debt. Investigations are still on-going for British Gas, Utilita and Ovo.

It comes after new stricter rules on forced prepayment meter installations were introduced by Ofgem in 2023, following an investigation by The Times which revealed how debt collectors had.

Energy suppliers can no longer forcibly install a prepay meter on the highest risk customers, including households where someone is over the age of 75, those with children under the age of two, and households where someone has a severe health condition.

Dhara Vyas, chief executive of Energy UK, which represents energy firms, said: "Involuntary installations have been a last – but necessary – resort for cases where repeated attempts to address debt with the customer through other means have been unsuccessful.

"It's bad for customers to fall further and further into arrears, and bad debt ultimately drives up the prices that is paid by all customers."

It comes after it was revealed that will go down again this summer. The Ofgem energy price cap is being reduced by 7% - taking the typical annual bill from £1,849 to £1,720.

The price cap for someone paying by pre-payment meter is falling from £1,803 a year to £1,672, and the yearly charge for someone who pays on receipt of bill is going down from £1,969 to £1,855.

The Ofgem price cap does not put a limit on how much you can pay for energy - instead, it sets a maximum unit price for unit rates of gas and electricity, plus standing charges.