Martin Lewis urges energy direct debit customers to check if they are in credit | Personal Finance | Finance

“I tend to say if right now you have a month or two worth of direct debit in credit – so let’s say if your bills are £300 a month – if you’ve got £500 of credit that’s probably on the high side.

“So unless your direct debit is over £1,000 a month, which is unlikely but does happen, it sounds like you are too much in credit.”

He also said another factor to consider is the fact energy bills are dropping in July. The Ofgem price cap is falling from the start of July, with average bills for a typical household to fall to £2,074 a year, down from the current £2,500 a year.

Mr Lewis said: “The fact that energy bills will be dropping in July means you don’t need as much credit as you did.

“Now under energy firms licence and conditions they cannot unreasonably hold on to your money.

“I would make a formal complaint asking them to justify why you are so much in credit and unless you get a decent justified answer, I would then take them to the energy ombudsman.”

The financial journalist also recommended a person take a meter reading before contacting their energy supplier to ensure the details about their usage are up to date.

Asked if the person should consider cancelling their direct debit, Martin said this would likely not be a good idea.

He explained: “Direct debit is the cheapest way to pay, payment in receipt of bills can be six or seven per cent expensive.

“If you really don’t like paying by monthly direct debit, where your usage is smoothed out over the year, then ask [your supplier] if you can switch to variable direct debit that keeps you on the same cheap rate but then you pay each month based on what you’ve used.

“But do remember, when it comes to winter that means your bills are going to be massive – in summer it’s easy, in winter it’s not.

“The problem isn’t monthly direct debits, it’s the terrible implementation of the way a few firms do monthly direct debits.”

The financial journalist also recommended a person takes a meter reading before contacting their energy supplier to ensure the details about their usage are up to date.

Energy bills increased from April when the instalments from the £400 energy bills discount came to an end.

Millions of Britons on means-tested benefits, including Universal Credit, are receiving a £900 cost of living payment to help pay for energy bills and other basic needs.

The payment is going out in three instalments, with the first £301 payment going out recently, with the second £300 instalment in autumn 2023 and the third £299 payment in spring 2024.

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