HOUSEHOLDS may unwittingly have built up hundreds of pounds on their energy account, so Martin Lewis is telling people how to get their cash back.
Mr Lewis explained: “Over 70 per cent of us pay energy bills by direct debit – a good thing, as it gets you the cheapest rates.
“But it can give firms the chance to build up a reservoir of customers’ money. It’s time to get that money back!”
Why accounts get into credit
According to energy regulator Ofgem, there are two main reasons why accounts build up credit.
The first, is that unless you have a smart meter and regularly submit meter readings, your bills are estimated.
This means energy companies may be charging you for more energy than you actually use.
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The second issue, is that you while you may pay the same direct debit each month, some months you’re using less energy than others.
In the summer for example, you’re likely to use less energy than in the winter as it won’t be so cold or dark.
Interestingly, research compiled by supplier Octopus Energy for Mr Lewis’ consumer website MoneySavingExpert.com found a “lag” – or time delay on when accounts tend to come into credit.
Households on Octopus Energy’s 12-month fixed tariff paying a direct debit of £72 a month from January, for example, only come into credit in August.
That’s because their account immediately goes into debt at the start of the year when the weather is cold and they’re using more energy.
But it isn’t until May when the balance in the account starts to become positive.
And of course, you then might need this in-credit cash come autumn again to pay for your higher winter bills.
While all suppliers will work differently, Mr Lewis says that if you’ve got at least a month’s buffer in your account, it’s worth claiming this back.
“If you’re in credit, certainly over a month’s worth, your direct debit may be too high and you may be owed cash,” said Mr Lewis.
Of course, at the other end of the scale and your account is in debt, Mr Lewis suggests asking your supplier to up your direct debit.
Mr Lewis said: “If you owe far more than you should for the time of year, your energy direct debit is likely too low.
“That may seem like a win in the short term, but it’s storing up trouble for the future.”
How to reclaim in-credit cash
If your account is in credit you just need to ask for the money back from your supplier.
According to the regulator, suppliers must refund people “promptly”, unless there are reasonable grounds not to.
Ofgem adds that the largest suppliers typically review customers’ accounts on a yearly basis and automatically refund credit balances.
But Mr Lewis points out that if your supplier is paying interest on your credit, such as Ovo which pays up to 5 per cent, then you may want to keep the cash in your energy account as you’re unlikely to earn more from a savings account.
If your supplier goes bust, Ofgem will arrange for a new provider to take on your supply and this provider will be responsible for paying out any in-credit savings.
Meanwhile, the Big Six energy firms have been accused of running a “cartel” after they ALL hike prices to the same amount.
But one firm is bucking the trend by announcing price cuts of £20 a year for 1million users.
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