UK households will be eligible for £40 compensation as part of new smart meter rules that kick in next week. Energy regulator Ofgem announced that, from Monday, households across England can receive £40 in compensation from their energy supplier under three circumstances.

Charlotte Friel, director of retail pricing and systems at Ofgem, said: “Millions of consumers rely on their smart meter every day for accurate billing, cheaper tariffs, automatic meter readings and real-time data to help keep track of spending. But we know many customers who want a smart meter wait too long to get one installed or face delays on repairs when it stops working – this needs to change.”

Ofgem’s new rules mean customers will automatically receive a £40 payment when:

• A customer has to wait more than six weeks for a smart meter installation appointment
• A smart meter installation appointment fails due to a fault within the supplier’s control
• A customer reports a problem with their smart meter, but the supplier does not provide a resolution plan within five working days of the report

Ms Friel added that the three rules were necessary to lay out clear expectations of suppliers and to encourage them to improve smart meter standards, and protect “consumers from poor service if things go wrong”.

Martin Lewis, founder of MoneySavingExpert.com, welcomed the change. He said: “Broken smart meters were high on the list of issues I raised with Ed Miliband when he first became Secretary of State. He promised me he’d investigate, so I was pleased when they told me this announcement was coming.

“Far too many smart meters, likely one in five, don’t work as they should – a problem not just for all the homes with broken ones, but for the smart meter rollout. With so many dissatisfied customers, word-of-mouth is bad, so people tell their friends and neighbours not to get one.

“We need to shift firms’ focus from just installing smart meters to promptly fixing those that are broken – not just meters that go into dumb mode, but crucially all elements, including in-home displays that stop working. That’s the aim of this plan, and while it’s taking a softer approach than we proposed, it is an improvement and we’ll be monitoring to see if it delivers.”