Martin Lewis: Why it’s the PERFECT time to check if you can reclaim £100s of energy credit

If you're one of the about 70% of UK homes that pay electricity and/or gas bills by direct debit, it’s important to check NOW if you're due credit back. This tweet I received from Claire explains why perfectly: "@MartinSLewis Phoned my energy supplier as I was paying £147/month, and was £960 in credit. They reduced my DD to £80 and I got a £570 refund."

Pay by monthly direct debit and energy firms usually bill based on an estimate of your usage. However, these estimates can frequently be wrong. That leaves some massively overpaying, others underpaying.

Update February 2019: I wrote this blog last summer – and have now, at last, managed to get an energy firm to give me exact data on how much you should be in credit or debt at different times. I will be publishing a new blog with that in soon (ensure you get the MSE weekly email which will tell you when that's live).

What that data shows is that if you have an up-to-date energy bill now from around the end of January (and have given meter readings), you would expect to be about one month's worth of direct debit IN DEBT. So if you are over a month in credit, it's likely that is too much.  So follow the info below on what to do.

Of course, energy usage is seasonal – direct debits aim to smooth that out, so you pay the same amount each month. That means you should generally be in credit going into winter, and by now, spring, have no credit or even a slight deficit. This is why this is the safest possible moment to judge if you’re overpaying. 

• Do you give regular meter readings? If not (unless you've a smart meter doing it for you), fix this first – otherwise neither you nor your energy firm knows your actual usage. After you've given a reading, ensure it's factored into your bill before the next step…
  
  
• In credit by over a month's direct debit? Go online or call to find out. A month's worth is a lot in spring, so politely request your provider repays any excess over that.
  
  Plus, energy firms' licence conditions give you a right to fair direct debits. So if you've too much credit now, ask it to justify why (there may be a legit reason); if it can't, get it lowered.
  
  
• Old providers may owe you credit too. When you switch energy firm you should be given any credit back at that point – yet for years many firms operated 'don't ask, don't get' policies.
  
  This means if you missed out, even if it was a good while ago, ask for it back. As Aston told me: "Eight minutes' work calling old energy suppliers, got £140 refunded. Why don't more people do this?" More help on this in Reclaim old energy credit.

For those who discover they owe their energy firm large amounts of money at this time of year, it’s almost certainly because your direct debit is too low. That may seem good in the short run, but it’s storing up trouble for the future. If you don’t deal with it, you’ll face an enormous direct debit, or a big bill if you switch elsewhere, or both.

So don't delay – speak to the energy firm about increasing the direct debit. If it’s unaffordable, the Energy Saving Trust can give details of help available. Of course, checking that you’re not overpaying for energy is crucial too, and that applies for those who’ve been building up too much credit as well.

Many people, especially those on big six standard tariffs, are overpaying by more than 40%. The easy way to find out if you’re paying too much is to use a comparison site – yet do ensure it's one that is whole of market by default, as some are now allowed to hide deals that don’t pay them.

The MSE Cheap Energy Club is whole of market by default, and also gives £25 dual-fuel cashback if it can switch you.