Energy suppliers in the UK holding £8.1 billion of customers’ money
Figures just published by the regulator Ofgem confirm that electricity and gas suppliers have accrued a total of £8.1 billion customer bill overpayments at the start of 2023.
A number of households and businesses pay by a fixed direct debit amount with the aim of building up a credit in the summer to take into the winter when we all tend to consume more energy.
However, according to Energy UK, a lot of direct debits were set in 2022 and early part of 2023 and based on forecasts made when prices were a lot higher.
We have also reported recently that consumers are also using less energy as they are doing their best to save as much money as possible. This could be a factor if your supplier is not changing the monthly direct debit amount to account for the reduction.
All of these factors will go some way to explain why suppliers are currently sitting on large sums of customer cash. Every case will be different but our advice would be to check your latest bill, make sure that the last meter read was accurate and then speak to your supplier if you have a large credit.
Be mindful of the fact that we are about to move into the winter period but your supplier will help you understand how much your consumption goes up during this period and align the direct debit amount accordingly.
One of the key areas to make sure that you avoid a credit building up is to read your meter at least once a month. Even better, speak to your supplier and ask them to fit a smart meter as you just pay for what you use and your bills are accurate.
If when you check your latest bill and confirm that you have a credit, Ofgem said that “customers have the right to request their balance back at any time and be refunded in a timely fashion”.
“Earlier this year, we strengthened rules regarding direct debits, which should prevent excessive accumulation of consumer credit balances. Suppliers should be basing their direct debits on the most accurate available information.”
The £8.1bn held in credit is from households and businesses, although most of it will be from households.