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What to do when your energy bill increases

author: Adele Kitchen

By Adele Kitchen

On 1st October 2021, the energy price cap rose to 12%, due to an increase of over 50% in energy costs over the first half of the year. As a result, many energy suppliers have decided to increase charges and 15 million customers have seen their energy bills go up.

Jonathan Brearley, chief executive of Ofgem explains: “The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.” But she appreciates that the recent increase to the cap “is extremely difficult news for many people.”

If you pay for your fuel by direct debit, then your payments may have been adjusted automatically. So, you need to check if you’ve been impacted by these recent changes, and make sure that you’re being billed in proportion to how much energy you use annually.

If you’ve been affected, and believe your bill is higher than it should be, you’re within your rights to challenge your supplier.

Can my energy supplier increase my direct debit?

Yes, they can. There are different reasons why an energy supplier may decide to increase your direct debit – not just because the energy price cap has gone up.

For example, unless you take regular meter readings or have a smart meter, then your bills will be based on estimated usage for the year. This isn’t always accurate – especially if you’re a new customer with no track record to go off.

If, after a few months, your supplier realises that they underestimated your usage, then they may decide to increase your direct debit so it’s more in line with the amount of gas and electricity you actually get through.

Can my direct debit be increased without notification?

No, your energy provider must inform you before increasing your direct debit and explain the reason behind it. If they don’t inform you, or your bills have gone up disproportionately, then you have the right to challenge your supplier, by following these steps:

  • contact your supplier and ask them to explain why they’ve increased your bills and request the meter readings they used in making their calculations, so you can check these against your bills
  • if you don’t agree with their explanation, ask them to lower your payments to reflect your usage
  • if they won’t lower them to your satisfaction then you can make a formal complaint, though you should make every effort to resolve the situation and document any communication beforehand.

What if I use less energy than my direct debit?

If you’re using less energy than you’re paying for, your account will go into credit. If this happens, you can contact your supplier and ask them to reduce your direct debit, to match your true annual usage.

Can I claim back credit from my energy supplier?

Yes, it is possible to get a refund if your account goes into credit. Some companies will send refunds automatically, but if you haven’t had any money back, you can:

  1. contact your energy company
  2. provide them with an up-to-date meter reading
  3. tell them how much credit you’d like back

If your supplier refuses to give you a refund, they should provide a good reason for this. For example, they may take seasonal fluctuations into account. If you’re in credit in the summer, this may even out in the winter when you’re using more heating. In which case, any credit could act as a handy buffer. So, you may want to leave your account in credit and check your balance again after winter.

What happens if I cancel my energy direct debit?

If you cancel your direct debit you could end up harming your credit file. Missed payments will be recorded on your file and will stay there for six years. If you miss between three and six payments, your supplier may default your account and pass it to a debt collection agency. All of which will have a negative impact on your credit score and ability to get credit in the future.

Should I cancel my direct debit if my energy supplier goes bust?

You can cancel your direct debit if your current supplier goes bust, as you’ll be automatically moved to a new energy supplier, and they’ll contact you to set up a new direct debit.  If you have a credit balance, it will move across to your new account. 

Read on to find out how to get help with your gas and electric bills.

Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.

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