Notice: Use of undefined constant REQUEST_URI - assumed 'REQUEST_URI' in /customers/f/d/b/newscabal.co.uk/httpd.www/wp-content/themes/twentynineteen/functions.php on line 73 Why your energy supplier could owe you more than £200 - NEWSCABAL

Why your energy supplier could owe you more than £200



Energy companies are holding on to £200m more of their customers’ cash than they did this time last year, according to new research.

In fact, energy suppliers owe 12 million UK households a total of £1.5bn, an increase of 15 per cent compared to 12 months ago, new data from uSwitch shows.

The price-comparison site has surveyed a sample of 2,000 bill payers and found that 45 per cent could reclaim an average of £126 each, while one in 10 could be owed a rebate of more than £200.

Of course, it is normal to accrue credit over the warmer months of the year. It’s one of the ways that energy bills can be kept roughly even, rather than hitting customers with a painful hike over winter.

But the milder winter and spring meant consumption fell, contributing to the rise in credit levels. According to the consumer website MoneySavingExpert, more than 70 per cent of people pay energy bills by direct debit, which helps them access the cheapest rates.

However, it does also allow those companies to build up a reservoir of customers’ money.

And they are not allowed to simply keep building up that pot of cash. Energy suppliers’ licencing conditions state that they must take reasonable steps to ensure the direct debit levels they set are fair – which means customers can ring and ask for more information on the amount they pay and how much is in their account.

If an account has built up credit then the supplier must refund if asked, unless they can clearly explain why not.

Very few energy providers pay decent levels of interest on any credit balances and it’s worth finding out if yours does, and factoring it in. For example, OVO Energy customers who pay by monthly direct debit can earn 3 per cent interest on their credit balances in their first year, rising to 4 per cent in their second year and 5 per cent every year after that.

Most people wouldn’t earn any more than that if the money was in their savings accounts and so may not be as worried about asking for their money back. 

Of course, it isn’t a savings account and doesn’t have the protections of a savings account, so it is still a good idea to keep an eye on the balance and stop it growing too high.

Make a change, save some cash

To really make a difference, households could both reclaim what they are owed and switch providers.

Recent falls in wholesale energy costs mean there are now many cheaper deals on the market that could save bill-payers hundreds of pounds if they move from an expensive standard variable tariff.

In fact, uSwitch has worked out that the average standard-tariff customer could save and recoup almost £500 if they reclaimed their credit balance and then switched to the cheapest deal available.

And more customers than ever are switching. More than 1.45 million energy switches took place in the first three months of this year, according to Energy UK. That’s up from 1.3 million over the same period in 2018.

Rik Smith, uSwitch’s energy spokesperson, says: “The energy industry could make things far easier for those who find themselves in credit. 

“While some energy companies already have good systems for refunding customers, it should be standard practice across all suppliers to review accounts regularly and provide the option of automatic refunds or reduced payments for those more than one month in credit. 

“People shouldn’t have to chase to get their own money back.”

The other side

Not everyone can demand a refund, of course. There are 4.1 million households who are in debt to their energy supplier after the winter, according to the uSwitch research. 

That’s not necessarily the disaster it sounds like; plenty of people go into the red over the colder months and their supplier will usually adjust their monthly bill up to reflect that until they have caught up.

It’s important that households provide regular meter readings to their energy supplier to ensure they do not gradually fall into a debt that would mean higher bills – or even a demand for a lump sum – later.

But for some people, the debt reflects an uncomfortable truth about the affordability of energy. 

Last year Citizens Advice revealed that since 2011 it has seen a significant increase in the proportion of debt issues it helps people with that are related to household bills.

Households that are in a large amount of debt to their energy supplier may be blocked from switching, even if doing so would save them hundreds of pounds and make repaying that debt simpler.

If the debt has only existed for 28 days or less then the supplier can’t stop a customer from moving and the amount is simply added to the final bill. However, longer-standing debts must be repaid before an account can be switched.

Customers repaying debt via a prepayment meter are allowed to switch as long as they owe less than £500 for gas and £500 for electricity, with the new supplier taking on the debt.

Smith adds: “Even if you owe your supplier money – which isn’t uncommon at this time of year – you can still check whether your supplier has a cheaper tariff you can switch to, meaning you can pay less for your energy and start to reduce the amount you’re in debt.”



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