UPDATE: |Martin Lewis urges anyone who pays for energy with direct debit ‘to check today’ News

Due to the way monthly Direct Debit payments work customers may be eligible to get £100s back

Martin Lewis is urging anyone who pays for energy with a direct debit to ‘check today’ to see if they could be owed money in credit.

The Money Saving Expert has warned that it’s the “perfect time” to cash in on energy credit as we are heading towards the bottom of the “energy Direct Debit cycle.”

Posting on the social media website X, he said: “Energy firms are said to be sitting on £3bn of our cash in Direct Debit ‘credit’.

“CHECK YOUR ENERGY CREDIT TODAY! It’s the perfect time as you should have min credit at this point in the cycle. Some’ll be due £100s back.”

Mr Lewis has warned that energy companies have built up a “huge reservoir” of money from homes that pay for their energy bills by monthly Direct Debit.

This means customers pay a set amount for their energy each month – regardless of if they they use less than what they pay for.

Effectively, this can put customers ‘in credit’ with their energy bills. Because monthly Direct Debits aim to smooth out seasonal use, they estimate your annual usage and divide that by 12 so you pay the same each month.

This means you build up credit in the lower-use summer, and use up that credit (or go into debt) in the higher-use winter.

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And because we are approaching these lower-use summer months, Martin Lewis is urging people that it is the perfect time to get some money back.

On the Money Saving Expert website, he said: “We’re heading towards the bottom of the cycle, as late April and early May is usually when you’ve minimal credit/maximum debt before you start to rebuild it.

“Monthly Direct Debits are a great budgeting concept, ruined by poor delivery due to firms mis-estimating use or credit-grabbing. Yet you have rights to ensure it is done fairly.

“Under condition 27 of both the gas & the electricity supply licence rules for Eng, Scot & Wales, suppliers must: 1) Set fair Direct Debits. 2) Give clear explanations. 3) Refund credits where appropriate. So let’s ensure that happens…”

To get any money back from your account – which could be £100s – you need to first of all check your usage history is up to date. You can do this either by having a working smart meter that does regular readings for you or by submitting an up-to-date meter reading and wait until that has been incorporated by the firm in its calculations.

Then you need to work out how much credit you should have. According to Martin Lewis: “My rough rule of thumb… over a month and a half’s credit right now is likely too much.

“Exactly how much credit you should be in depends on when you started with the firm … eg, those who started with a firm around this time of year will rarely be in debt if things work well.

“Yet as this is the low point, I’d suggest if your energy account is up to date and is more than a month-and-a-half worth of Direct Debits in credit, it’s worth considering getting some of that money back.”

If you are in too much credit you should contact your firm and ask them why. There may be a legitimate reason, but the rules state if too much credit has accumulated and a customer asks for it back, suppliers must refund it – or clearly explain why not.

If the firm doesn’t do this, you can make a formal complaint, and if the firm rejects it, Mr Lewis says you should escalate it to the free Energy Ombudsman to adjudicate.

He said: “A few firms do promise automatic refunds or reduced DDs if your credit’s too high on the anniversary of you joining, but others require you to check (see firm-by-firm refund rules).”