Energy suppliers are sitting on £1.8billion pounds worth of consumer credit – with over a million people owed £300 each, figures show.
The refunds are linked to direct debit payments, which often result in people overpaying on their usage for the year – money that is typically used to adjust their next bill.
Direct debit payments generally stay the same throughout the year, but consumers are likely to be in credit with their supplier over summer, when they’ve used less energy, and in debt during the winter months when they’re using more heating and lights.
As we approach the warmer months, almost half of all UK households are due a refund from their energy provider, with the average amount worth £142, a Uswitch report has found.
It said the total owed to UK households is £1million higher than last April, despite people using more energy while at home during the pandemic.
Additionally, a quarter of energy bill-payers in credit are owed a rebate of more than £200 - up from one in ten last year. Some 535,000 households are due more than £500.
Some credit on the account is useful to have, especially where your energy supplier does not issue a bill every month - it helps with managing the energy bills. But it is important to see how much credit is still outstanding once the bill is settled, as there may be a surplus.
Not all energy providers automatically issue refunds to customers whose accounts are in credit.
Almost three in five bill-payers say their energy supplier has never automatically credited their account – meaning people could be missing out.
Meanwhile, more than a third of those in credit say their supplier has never been in contact with them to review their direct debit payments. A growing balance can signal that a customer is paying too much each month for their energy.
The energy watchdog Ofgem is consulting on introducing an auto-refund system in which credit balances are automatically refunded to direct debit customers on the anniversary of their tariff starting.
Auto-refunds could be useful for many consumers, as almost half say they do not know how to claim back a credit balance.
At the other end of the scale, four million households are in debt to their supplier at the end of winter, owing £529 million altogether.
The average amount of debt has fallen to £126 this year, down from £142 last year.
Sarah Broomfield, energy expert at Uswitch.com said suppliers should review customers’ direct debit payments more regularly.
“At a time when many people’s finances are stretched any windfall would be gratefully received,” she explained.
“A growing credit balance can be a sign that a customer’s direct debit is too high - yet a third of those in credit say their supplier has never adjusted their payment.
“It’s clear that Ofgem’s proposal to introduce automatic rebates will benefit a huge number of consumers, particularly those who do not know how much credit they have, or do not know how to obtain a refund.
“Many people who have been affected financially by the pandemic may be looking for ways to save money, and it’s worth checking with your supplier to see if you are owed any money following your most recent bill being paid.
“It’s also important to provide regular meter readings to your energy supplier if you do not have a smart meter. This will make it easier for your supplier to see if you are using less energy than predicted, and they may reduce your direct debit payments.
“If you are out of contract with your supplier, you could also save yourself money by switching to a cheaper deal.”
To find out the best deal for your household, see our guide on how to switch your energy supplier.
