Suppliers argue it is right for customers to build up credit in their energy accounts – but it is important to know when to demand some of it back
Energy suppliers are sitting on at least £4.6billion of customers’ cash.
Figures from industry regulator Ofgem show that, between July and October, the average customer on a fixed rate tariff had £267 worth of credit in their account. Suppliers argue it is important for those on monthly direct debit to build a certain amount of credit to smooth out what would otherwise be spikes in payments, especially over the summer.
But the amassing of large credit balances in firms’ accounts has raised questions about how much is too much. The situation has added to billing issues and confusion for customers. Ofgem’s data showed that, between October 2023 to September last year, the average amount in credit built up was £3.53billion. Over the same period, the average household energy account in credit had £233. The £267 average for last July to September was 13% lower than the same time in 2023.
Ofgem said: “The amount of credit that is held in energy accounts goes up and down during the year. Accounts will have more credit in them during the summer but then more is spent in the winter as more energy is used. Each household may have different experiences with how much credit they have on their balance at different times of the year.”
Citizens Advice says: “You can claim credit at any time. But you should probably leave money on your account during summer and autumn to cover higher energy costs in winter. Before claiming back any money, think about whether you’re likely to have higher energy bills in the months ahead, and if it will be difficult to pay your bills without keeping the credit on your account. If the amount you’re owed is more than the amount you pay as a monthly direct debit, you might want to claim back the difference.”
It came as energy bills for 26 million households across the country rose from January 1. Regulator Ofgem’s energy price cap increased by an average 1.2% to £1,738 per year for a typical household, on top of a near 10% jump in October. Industry experts Cornwall Insight predicts the cap would rise again – next April – by another 3%, to £1,785 a year.
