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Liverpool Echo
Liverpool Echo
World
Lottie Gibbons

Martin Lewis explains what to do if your direct debits are increasing

Martin Lewis has explained what you should do if your direct debits are increasing amid the energy crisis.

Several UK energy suppliers have collapsed due to rocketing global wholesale energy prices.

The chaos in the sector has left experts warnings Britons they could see their energy bills rise by 30% next year.

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Research agency Cornwall Insight has predicted further volatile gas prices and the potential collapse of even more suppliers could push the energy price cap to about £1,660 in summer.

The forecast is approximately 30% higher than the record £1,277 price cap set for winter 2021-22, which commenced at the start of October.

Ofgem reviews the price cap once every six months, and changes it based on the cost that suppliers have to pay for their energy, cost of policies and operating costs, among other things.

However, Martin said following the focus on the energy sector, he has been asked one question repeatedly.

The question that is often asked is: "I'm comfortably in credit but my energy firm's hugely hiked my direct debit, is this fair?"

Responding, Martin said:: "If it's out of proportion to the cost rise, no, and it's worrying. A direct debit is designed to smooth out your energy costs across a year.

"Going into winter, it's normal to be a month or so in-credit. So as the price cap has risen 12%, if you're on it, expect a similar Direct Debit hike. If you're coming off a cheap fix and paying 30-40% more, expect that too.

"Yet if you're in credit and your Direct Debitis rising way above the rate rise, there's an issue.

"First, do is a meter reading, so any Direct Debit estimate is based on up-to-date usage. Once that's processed, call and politely ask the firm to justify the hike.

"You've a right to a 'fair direct debit' under energy firm licence conditions. If it can't, ask for it to be lowered. My concern is some firms are hiking DDs right now to help their cashflow, even when it isn't justified."

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