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Energy suppliers sit on £3bn of your cash: How to reclaim the credit

Energy suppliers sit on £3bn of your cash: How to reclaim the credit
Paloma Kubiak
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Paloma Kubiak

Millions of households have a healthy surplus of cash sitting in their energy accounts as we head into the warmer months. But only a small percentage will ask for the credit back.

Around 16 million households (56%) have an estimated £3bn in energy credit sitting with their supplier, averaging £210 each.

According to comparison site Uswitch, one in seven have balances over £300, while 5% have more than £500.

Its research revealed Newcastle is the UK’s energy credit capital, with the average home having stashed away £315 with their supplier, while Bristol had the least at £176.

Meanwhile, Octopus Energy customers were found to have the highest average credit out of the major energy suppliers, at £233.

At the other end of the scale, the average debt per household has decreased from £234 last year to £194. However, the number of homes in debt has risen by 167,000, with four million households in the red with their supplier to the tune of £771m.

Energy credit build-up

Billpayers should usually exit winter with little to no credit, having used it during the colder and darker months.

Meanwhile, credit typically rebuilds during the warmer and lighter-for-longer spring and summer period, when energy usage is generally lower.

However, Uswitch found that two in five households (44%) with more credit than this time last year say their balance built up over winter because their direct debit has been set too high.

Two-fifths also attributed the increase in their credit balance to their energy-saving efforts, while a third (33%) said they used the heating less often due to the mild winter.

Overall, the £3bn credit excess recorded this year is £3.4bn lower than last year.

However, if you’re one of the billpayers with a big surplus, you should consider reclaiming the credit, Uswitch suggests. When asked, just 28% said they would ask for the money to be returned.

It said that, in recent years, billpayers were largely advised to keep some credit in their account to help pay for energy bills that were high over the spring and summer.

But bills are now falling, as the energy price cap reduced 12% in April, and is forecast to fall further in July.

It suggested that any excess (generally any amount above two months’ worth of payments) is reclaimed.

It added that four in five who requested a refund received it within four weeks of claiming it.

Will Owen, energy expert at Uswitch.com, said: “If you have a high credit balance, you may want to ask your supplier to check that your direct debit is set at the right level for the amount of energy you use.

“Although falling energy bills is good news, they are still high by [historical] standards, and unfortunately the number of people in debt has risen slightly.

“It remains important that those who do owe money to their suppliers continue to be given the support they need, and we recommend that you contact your provider if you are worried about your energy debt.”

“To ensure you are being billed accurately, make sure you submit regular meter readings to your supplier if you do not have a smart meter.”

Related: Calls for an end to the energy exit fee ‘trap’