Martin Lewis explains if energy companies are allowed to increase direct debit payments
The energy price cap, which sets a limit to the rates you pay for gas and electricity, just increased, leading to higher energy bills for 15 million households – and many will see their payments by direct debit pounce in response
Martin Lewis explained if your energy supplier can increase your direct debit bill if you are in heavy credit.
The founder of MoneySavingExpert says he has been inundated with this issue as UK households face rising energy bills.
The energy price cap – which sets a limit to the rates you pay for gas and electricity – has just increased, leading to higher energy bills for 15 million homes.
Ofgem raised the price cap for standard and default tariffs from Â£ 1,138 for a typical user to Â£ 1,277, an increase of Â£ 139.
Meanwhile, the price cap for prepaid customers has increased by Â£ 153 from Â£ 1,156 to Â£ 1,309.
Gas prices, which are at record highs, are blamed as nine energy companies went bankrupt last month, affecting around 1.7 million customers.
Speaking to his 1.2 million Twitter followers, Martin shared his response to the question, “I’m comfortably credited, but my energy business has increased my direct debit tremendously, is that right?” What do I do?”
In his response, the money-saving guru said it depends on whether your direct debit increase is “out of proportion” with the cost increases.
Martin explained, âA direct debit is designed to smooth your energy costs over a year.
âIn winter, it’s normal to be credited for about a month. So as the price cap has gone up 12%, if you’re there, expect a similar rise in direct debits.
âIf you go out of a cheap solution and pay 30-40% more, expect that too. Yet if you’re in credit and your direct debit goes up well above the rate hike, there is a problem.”
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Martin suggested doing a meter reading first to make sure you’re being billed correctly in the first place.
Once you’ve done that, if you think you’re still overcharged, call your energy supplier and ask them to explain the increased payments.
âIf he can’t, ask for it to be lowered,â Martin said.
“My concern is that some companies are increasing pre-authorized debits right now to improve their cash flow, even when it’s not warranted.”
Speaking last month, Martin also asked households to screenshot their energy bill online now, even if they haven’t seen their energy supplier go bankrupt.
Indeed, if a supplier goes bankrupt, you have a document indicating your last energy consumption.
The founder of MoneySavingExpert also explained whether or not you should cancel your direct debit if your energy company goes bankrupt.
And speaking on his ITV show last month, Martin said households on the energy price cap are now enjoying the cheapest deals.