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Martin Lewis, founder of Money Saving Expert, has urged Britons who pay for their energy by direct debit to check if they are owed hundreds of pounds by their supplier.
He said this month is the “perfect time” for customers to check with their supplier they are being charged correctly.
Writing in the weekly newsletter for Money Saving Expert, he said a person may be overcharged because of how the direct debit amount is worked out.
A person’s monthly direct debit is based on their annual cost, which is usually divided by 12 to create the monthly payment amount.
This allows the customer the certainty of knowing how much they will pay each month, which is a “good budgeting concept”, Mr Lewis said. This also works out cheaper than other ways of paying.
READ MORE: British Gas has reopened its energy debt grants fund – and anyone can apply
But the estimates of usage can be inaccurate meaning a person is “unnecessarily overpaying with too much credit or underpaying and getting into energy debt”.
Mr Lewis urged consumers to give regular meter readings to their supplier or to get a smart meter, which automatically sends readings to the supplier to make sure they are being charged the correct amount.
He said: “As prices have moved (gone up) a lot, so have direct debits, and some are heavily out of kilter with use.”
He said the situation has changed since the end of the instalments from the £400 energy bills discount, which ended with the final instalment in March.
The Money Saving Expert website has a direct debit calculator tool which a person can use to roughly estimate how much they should be charged.
The financial expert warned against switching from direct debit to payment in receipt of bills, as this may cost eight percent more.
Consumers also have the option of switching to variable direct debit, meaning the amount they pay each month isn’t set, but this can mean much larger bills in the winter months.
Many other household bills also increased from April, including water bills, council tax, mobile and broadband.
Millions of Britons on certain means-tested benefits are receiving a £900 cost of living payment over this financial year in three instalments. The first £301 instalment has now gone out to most eligible people, with the second £300 instalment in autumn 2023 and the final £299 instalment in spring 2024.
Martin Lewis is the founder and chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip.
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.
