Martin Lewis explains what to do if the direct debit of your energy bill goes up
MARTIN Lewis explained what to do if your energy business has increased your direct debit.
Some households have found that their monthly energy bill has increased – even when they are in credit.
The amount you pay for energy by direct debit is “smoothed” over one year.
This means you pay the same amount every month, even when your energy use changes – you typically use more gas and electricity in the winter and less in the summer.
More than half of Britons pay their energy bills through direct debit, according to energy regulator Ofgem.
This often leads payers to build up a loan with their energy company.
The increase in direct debits comes as bills are expected to soar this winter.
The money-saving expert explained in a Facebook post: âIn winter, it’s normal to have about a month’s credit.
âSo since the price cap has gone up 12% if you’re at it, expect a similar hike in direct debits.
“If you go out of a cheap solution and pay 30-40% more, expect that too.”
The price cap limits the amount you will pay when you benefit from a Standard Variable Rate Tariff (SVR) for dual fuel (gas and electricity).
The cap rose from Â£ 139 to Â£ 1,277 in early October and could rise again next April.
Fixed tariffs are normally below the cap, but rising wholesale energy prices have caused prices to skyrocket and are now several hundred pounds higher.
This means that most bill payers are likely to be in the unusual position of staying on the SVR rather than changing.
But Martin explained that if you’re in credit and your direct debit goes “way above the rate hike, there’s a problem.”
He added that if the increase is out of proportion with the increase in costs, it is not fair and it is worrying.
Martin recommends that anyone in this situation first take a meter reading and share it with their energy company.
This means that the calculation they use to set up your direct debit is based on your most recent usage.
You can then ask your energy supplier to adjust the amount.
Martin said: “You have a right to a ‘fair levy’ in the license conditions of energy companies. If not, ask for it to be lowered.
“My concern is that some businesses are increasing pre-authorized debits now to improve their cash flow, even when it is not warranted.”
When an energy supplier increases your domiciliation, they must explain why and they must give you at least 10 days’ notice, according to Ofgem.
Energy companies typically review levies twice a year, according to the regulator.
If you have large credit, you can apply for a refund, but building up credit during the summer usually pays for the higher energy costs during the winter.
If your supplier recently changed their energy prices, it may affect your future bills.
If you are not satisfied with your energy company, you can complain to the Energy Ombudsman.
Hundreds of thousands of Britons have seen their energy companies go bankrupt in recent weeks due to the energy crisis.
Customers are automatically transferred to a new business and any credit they’ve already accumulated is protected as well.
But it does mean that many of those who had low fixed offers now face higher bills when they move.
If you are worried about the rising costs and how you are going to cover them, you can talk to your energy company.
There is also help for struggling households worth several hundred pounds.
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