British Gas says it will identify the customers who would most benefit from this support, meaning customers do not need to apply for the funds.
The free energy credit forms part of a new £10 million support package announced by the firm this week to offer more help to prepayment customers.
It comes after Citizens Advice called for a ban on energy companies “forcing” customers onto prepayment meters after an estimated 3.2 million people in the UK were cut off last year because they ran out of credit.
The charity said this is the equivalent of one person being disconnected every 10 seconds as they could not afford to top up the meter.
Based on Ofgem figures, it estimates that 600,000 people were forced on to the pay-as-you-go method last year, and predicts 160,000 more could be moved on to a prepayment meter by the end of winter if no action is taken.
The advisory service, which is the consumer watchdog for the energy market, said it saw more people who were unable to top up their prepayment meter in 2022 than in the whole of the last 10 years combined.
Furthermore, more than two million people were being disconnected at least once a month and 19% of those cut off in the past year then spent at least 24 hours without gas or electricity, leaving them unable to turn the heating on or cook a hot meal.
Prepayment meters are often installed when a household falls behind on bills, but they are more expensive than paying by direct debit.
As part of its support, British Gas has said it will ban forced remote switches to prepayment meters this winter, unless a customer requests one.
It has also committed to run extra vulnerability checks and will install smart prepayment meters to ensure that any customers having issues can be identified quickly, and support provided.
Chris O’Shea, Chief Executive of Centrica, parent company of British Gas said: “We know that some prepayment customers are self-disconnecting and not coming forward for help, so we have reviewed our policies to do more to target support at this group.
“As a responsible business we are doing all we can to support our customers during this crisis – our work with the British Gas Energy Trust provides grants and money advice services.
“As well as helping our customers with much needed cash grants, I’m really proud of how our teams are giving expert advice and support at this busy time to help guide people through this crisis.
“Our call centres are helping around a million energy customers each month with their bills and our engineers are in homes every day advising customers on how to be more energy efficient and make savings.”