Does your supplier OWE you money? Energy providers sitting on £1.8bn in credit from 13m homes despite more usage as people work from home
- More than one million bill-payers due more than £300, new data shows
- The total owed to households is £1m higher than last April
- This is despite more people using more energy when working from home
Energy suppliers owe roughly 13million households a total of £1.8billion in credit balances, new research has revealed.
More than one million bill-payers are due more than £300, according to data from Uswitch, at a time when some may be facing financial hardship.
It found that coming out of winter, 45 per cent of all households are due a refund from their energy provider, with the average amount worth £142— up £6 on last year.
The total owed to UK households is £1million higher than last April, despite people using more energy while at home during the pandemic.
Energy suppliers owe 13m households a total of £1.8bn in credit balances, research shows
Consumers who pay for their energy by direct debit can often find themselves in credit with their supplier as their monthly payments don’t exactly match their gas and electricity usage.
Direct debit payments generally stay the same throughout the year, but consumers are usually in credit with their supplier following the summer as they’ve used less energy.
They are then in debt during winter when they’re turning on their heating and lights more often.
Now a quarter of energy bill-payers in credit are owed a rebate of more than £200, up from one in ten last year.
Some 535,000 households are also due more than £500.
Having some credit on your account is useful to have, especially where an energy supplier does not issue a bill every month as it can help with managing payments.
However, it is important to see how much credit is still outstanding once the bill is settled, as there may be a surplus.
Not all energy providers automatically issue refunds to customers whose accounts are in credit, meaning any money owed to consumers can go unclaimed for longer than needed.
Some 59 per cent say their energy supplier has never automatically credited their account.
Meanwhile, 35 per cent of those in credit say their supplier has never been in contact with them to review their direct debit payments.
A growing balance can signal that a customer is paying too much each month for their energy.
To help this longstanding problem, the energy watchdog Ofgem is consulting on introducing an auto-refund system in which credit balances are automatically refunded to direct debit customers on the anniversary of their tariff starting.
A quarter of energy bill-payers in credit are owed a rebate of more than £200, new data shows
It said this could result in as much as £1.4billion in total or £65 per household on average being returned.
The regulator added it is concerned that some suppliers may use customers’ surplus credit balances to fund otherwise unsustainable business practices.
Auto-refunds could be useful for many consumers, as 49 per cent say they do not know how to claim back a credit balance.
At the other end of the scale, four million households are in debt to their supplier at the end of winter, owing £529million altogether.
However, the average amount of debt has fallen to £126 this year, down from £142 last year.
Experts are now calling for suppliers to review customers’ direct debit payments more regularly.
Sarah Broomfield, energy expert at Uswitch, said: ‘At a time when many people’s finances are stretched any windfall would be gratefully received.
‘A growing credit balance can be a sign that a customer’s direct debit is too high – yet a third of those in credit say their supplier has never adjusted their payment.
‘It’s clear that Ofgem’s proposal to introduce automatic rebates will benefit a huge number of consumers, particularly those who do not know how much credit they have, or do not know how to obtain a refund.’
Customers are encouraged to check with their supplier to see if they are owed any money.
They are also advised to provide regular meter readings to energy suppliers if they do not have a smart meter.
This will make it easier for providers to see if you are using less energy than predicted and, as such, they may reduce your direct debit payments.
For those looking to save even more money, they are encouraged to use price comparison websites to see if they could save by switching supplier or tariff.
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