Energy companies are holding on to £200m more of their customers’ cash than they did this time last year, according to new research.
In fact, energy suppliers owe 12 million UK households a total of £1.5bn, an increase of 15 per cent compared to 12 months ago, new data from uSwitch shows.
The price-comparison site has surveyed a sample of 2,000 bill payers and found that 45 per cent could reclaim an average of £126 each, while one in 10 could be owed a rebate of more than £200. Of course, it is normal to accrue credit over the warmer months of the year. It’s one of the ways that energy bills can be kept roughly even, rather than hitting customers with a painful hike over winter.
But the milder winter and spring meant consumption fell, contributing to the rise in credit levels. According to the consumer website MoneySavingExpert, more than 70 per cent of people pay energy bills by direct debit, which helps them access the cheapest rates. However, it does also allow those companies to build up a reservoir of customers’ money.
And they are not allowed to simply keep building up that pot of cash. Energy suppliers’ licencing conditions state that they must take reasonable steps to ensure the direct debit levels they set are fair – which means customers can ring and ask for more information on the amount they pay and how much is in their account.
If an account has built up credit then the supplier must refund if asked, unless they can clearly explain why not.
Very few energy providers pay decent levels of interest on any credit balances and it’s worth finding out if yours does, and factoring it in. For example, OVO Energy customers who pay by monthly direct debit can earn 3 per cent interest on their credit balances in their first year, rising to 4 per cent in their second year and 5 per cent every year after that.
Most people wouldn’t earn any more than that if the money was in their savings accounts and so may not be as worried about asking for their money back.
Of course, it isn’t a savings account and doesn’t have the protections of a savings account, so it is still a good idea to keep an eye on the balance and stop it growing too high.