- 10.4m UK homeowners are owed on average £95 in overpaid gas and electricity bills
- Most (61%) homeowners are in credit with their energy suppliers
- A quarter of those in credit are owed over £100 despite new rules designed to stop large credit balances building up
Energy suppliers are benefiting from an estimated £980m in overpaid household energy bills, according to new research published today. The survey, commissioned by Gocompare.com Energy, found that 61% of homeowners have overpaid their energy bills by an average of £95.
The research into energy bill overpayments also found that:
- A quarter of those with credit balances had overpaid their energy supplier by more than £100;
- 24% said their energy supplier had refunded the overpayment without being asked to;
- Nearly a fifth (19%) of homeowners in credit with their energy bills have asked their provider to reduce their monthly direct debit payments;
- 40% of homeowners usually leave the overpayment to sort itself out over time;
- 13% had asked for a refund.
Commenting on the research, Tom Lewis, Gocompare.com’s energy spokesman said: “Direct debit payments are a quick and easy way to pay your utility bills; they help smooth out seasonal variations in energy usage by spreading payments equally over the year. And, customers paying by this method can usually benefit from a discounted rate.
“Energy companies calculate direct debit bills following an estimate of a customer’s annual energy consumption, which is then usually charged monthly in 12 equal payments. While a small overpayment at the end of the summer months can be useful to off-set higher energy usage and bills for the winter, if the estimated usage has been set too high, a large surplus can quickly build up.
“Typically, energy companies review direct debit accounts twice a year and make any adjustments to the monthly payments accordingly. Where accounts are found to be £5 in credit at the review date, most of the big six energy companies give customers an automatic refund – provided the calculations are based on an actual meter reading. For example, British Gas will give an automatic credit refund for accounts with a credit balance of £5 if the actual meter reading has been received in the last four months, while E.ON requires a balance of £5 provided they have received a meter reading in the last six months.”
Tom Lewis continues: “Energy companies are also obliged to refund overpayments whenever customers request them to. So if at any time you find that you have a surplus on your energy bills you can contact your supplier to ask for it to be repaid to you, but again, you’ll need to provide an up-to-date meter reading.”
Details of the big six energy suppliers’ refund policies can be found on Ofgem’s website: https://www.ofgem.gov.uk/sites/default/files/docs/2013/09/direct_debit_factsheet_jan_2015_english_web_2.pdf
Gocompare.com has constructed a guide to help with switching energy suppliers
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Notes to editors:
*£980m calculation based on: 26.4 million households in the UK (ONS 2012) of which 64% (16.9m) are owner-occupied as opposed to rented. 61% have a positive credit balance on their utility bills (61% of 16.9m is 10.4m) 10.3m multiplied the average overpayment (£95) is £980.