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Households owed £928m* in overpaid energy bills

30 October 2017

39% of households are owed money from their energy provider;
Average overpayment across the UK is £85 but research shows wide regional variations of £63 to £103;
Only 9% of UK households in credit with their energy supplier have asked for a refund.
Millions of households who have overpaid their gas and electricity bills are owed, on average, £85 - leaving suppliers to benefit from a staggering £928m in surplus payments.  

Direct Debit (DD) is one of the easiest ways to pay energy bills and providers typically offer a discount to customers paying in this way.  The level at which a DD payment is set is based on an estimate by an energy supplier of a customer’s usage over the year.  Customers may use more, or less than the estimate.  Overpayments arise when a customer’s DD payment is set too high, as a result, they end up paying for more energy than they use.

Research** commissioned by GoCompare Energy found that 39% of households have overpaid their energy bills by an average if £85, while nearly a quarter (24%) have made excess payments of over £100.  

The research revealed wide regional differences in overpaid bills.  Households in London were the least likely (29%) to overpay bills while those in Yorkshire and Humberside top the list with nearly half (49%) having overpaid their energy bill. On average, people living in the North East make the largest overpayments (£103), those in the East Midlands the lowest (£63.60).

 Location % of households overpaying Average overpayment
 UK 39% £85.00
 North East 44% £103.00
 North West 47% £88.50
 Yorkshire & Humberside 49% £88.30
 East Midlands 39% £63.60
 West Midlands 35% £81.50
 East 39% £95.50
 London 29% £81.00
 South East 41% £85.60
 South West 37% £78.40
 Wales 33% £68.20
 Scotland 40% £97.10

Customers who find they have paid for more energy than they have used can leave the overpayment on their account to offset against future bills.  The big six energy providers (British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE) have DD policies which cover refunds.  Typically, these companies conduct annual reviews of DD accounts and, subject to an accurate meter reading, automatically refund overpayments of £5 or over.

However, customers with overpaid bills are entitled to ask their supplier, at any point in the year, for a refund.  Providers are obliged to refund overpayments unless there are reasonable grounds not to do so.

GoCompare Energy’s survey revealed that 39% of UK households holding overpaid bills usually leave the money on their account to knock-off future bills.  Residents of Yorkshire and Humberside (42%) and Scotland (42%) are most likely to leave overpayments on their energy accounts, while those in Wales are the least likely to (21%).

Only 9% of UK households in credit with their energy supplier proactively asked for a refund; customers living in London (14%) and the North East (14%) are the most likely to ask for their money back, those in Wales (4%) are the least likely. However, residents in Wales (32%) who’ve overpaid bills top the list of those most likely to ask for their DD payments to be lowered (22% for the UK); customers based in the North East were the least likely to ask for their DD payments to be adjusted.     

Commenting on the research, Ben Wilson from GoCompare Energy said, “According to Ofgem figures, more than half of us settle our energy bills by direct debit.  Once set up DD payments are made automatically, removing the physically hassle of paying bills.  Payments are spread evenly throughout the year which helps to make household budgeting easier.  Providers also usually offer a discount on DD bills.  However, because of the way DDs are calculated, some customers may end up paying too much – particularly by the end of the summer when energy usage has been lower.

“An easy way to help avoid building up a surplus on your energy account is to ensure you provide your gas and electricity provider with regular meter readings and, to read your bill when it arrives. This will help you and your provider better understand your estimated usage and whether this is in line with your actual consumption – which should lead to more accurate bills.”

- ENDS -

Notes to editors:

*£928mcalculation based on: 39% of households in credit on their energy bills.  According to the ONS (2016) there are 28 million households in the UK. 39% of 28 million is 10,920,000.  10.9m x £85.00 = £928,200,000 (rounded to £928m).

**On 10 October 2017, Bilendi conducted an online survey among 2,000 randomly selected British adults who are Maximiles UK panelists.  The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.