Money expert Martin Lewis is urging gas and electricity customers to call up their energy supplier and get their money back because it « should be in [your] bank account » earning interest for you and not your energy firm’s.
On the latest episode of The Martin Lewis Podcast on BBC Sounds and Spotify, released on September 22, Martin took a call from a listener who is concerned about the high amount of credit on his mum’s energy account.
He explained to Martin that his mum currently has £700 of credit on her energy account with E.On, and is paying £150 a month even though she’s only using £55 of energy.
Martin then explained – apart from the fact her direct debit is too high and needs to be altered – how energy customers can get overpaid credit back from their supplier, either by switching to another firm with a better deal, or by simply ringing them up and asking for it back.
Martin said: “We are at this time of year, this is the point where you should be in the maximum credit in the direct debit cycle.
“If you think about it, what you do is, as you go through the warmer months, from around May onwards, because you’re using less energy, you build up your credit. A monthly direct debit is where you pay a fixed amount across the year but it’s meant to smooth out this, but you’re building up credit during the summer months when it’s warm and using less energy, and then use them up during the winter months.
“And November is the split point in winter, November is the point where you tend to be at absolute maximum credit, so we’re only a month away from that. So at this point of the year, if you have a couple of months worth of credit, and exactly how much you have depends on when you started, that’s not a bad thing.”
Martin added: “Let’s say she’s using £150 a month worth of energy. In that case, at this time of year, I would not be worried about her having £300 worth of credit. Two direct debit months for her, of whatever her usage is.
“Anything above that I think should be in her bank account, not the energy firm’s bank account. So that’s the first principle I’d give you. At this time of year you want a couple of months direct debit, nothing more.”
Martin then said that if you switch to another energy firm, perhaps because there’s a cheaper deal out there, you will automatically get all of your overpaid credit back.
He said: “If she moves company, she should automatically get all of her credit back. They will do a final meter reading, unless she’s on a smart meter where it will be automatic, they will calculate how much she’s owed, and she should get all that money back within about a month.
“Alternatively if she stays where she is she can get in touch with E.On and say, ‘look, I only want a couple of months’ worth of credit, I would like about £400 back’. There will be a bit of a negotiation and they will give her some of that credit back and she stays into credit.”
