Money expert Martin Lewis is urging energy customers to get their money back if they’re in credit this April. Speaking on the latest episode of The Martin Lewis Podcast on April 2, Martin outlined to customers of any energy company that they could and should get a refund on their bills if they have excess credit this April, due to what he terms ‘the direct debit cycle’.
Although Martin didn’t name any specific energy companies, this would apply to any energy supplier, as they are all using the same Ofgem price cap for their standard non-fixed tariffs – that’s the same for British Gas, EDF, Eon, Octopus or any other supplier.
Because of the way energy bills direct debits work, the amount you pay on direct debit is always set at the same amount, even during winter when usage is high for heating and lighting, and summer when usage is lower (due to the absence of those things). The direct debit ‘smooths out’ your payments and takes an average of your usage, so you don’t pay more in winter than summer.
But the rate your direct debit is set at can be too high, for instance if you end up using less energy in the winter than your energy firm thought you would. Therefore, if you have a lot of excess credit at this time of year, you should ask for your money back, Martin urged.
Speaking on the latest episode of The Martin Lewis Podcast on BBC Sounds and Spotify, he said: “Your peak debt, the peak amount you should be in debt, is basically now. Around April. You’ve spent the winter using up, using more, so that you’ve built up a debt and as you move into the summer you pay that off gradually, and then once you get to around November you should be in maximum credit, for the warm and cold period.
“So if you’re in anything over a month’s worth of credit now, and I’d do it by the month because if your bills are £1,000 a month, £600 isn’t much, if your bills are £100 a month, £600 credit is a lot.
“So if you’re in anything over a month/month and a half’s worth in credit right now, it’s too much for me. As long as your Direct Debit is set right, as long as you’re building up credit and you’re doing regular meter readings, I would be asking for all but a month’s worth of credit back.
“So to be really plain, if your bill is £200 a month and you’re £600 in credit, I’d want £400 back now.”
The Martin Lewis Podcast is still available via BBC Sounds here and via Spotify and Apple Music.
