Direct Debit Payments for Energy Bills are too High

The high costs of energy bills is a hot topic in the UK, with a significant number of households expressing concerns over potential overcharges. The recent data from Uswitch sheds light on this pressing issue, revealing that many feel their direct debit payments might not be an accurate reflection of their energy consumption.

Key Points:

  • 31% of households believe their energy direct debits are set excessively high.
  • In April, Uswitch disclosed a surge in households with credit balances.
  • Regular meter readings enhance billing accuracy, but only 48% of non-smart meter households provide monthly updates.
  • Billing satisfaction has plummeted by 14% since the energy crisis onset.
  • Uswitch urges consumers to monitor direct debits closely and seek reviews if discrepancies arise.

Direct Debit Discrepancies

Despite falling energy prices and suppliers previously holding a whopping £7 billion in customer credit, a concerning 31% of households think their direct debits are unnecessarily high. This practice sees suppliers basing these debits on estimated yearly energy costs derived from household meter readings, divided into 12 monthly payments.

Surging Credit Balances

Earlier this year, Uswitch highlighted an alarming trend: the number of households with credit balances had spiked by five million, reaching 16 million. Moreover, over half of these bill-payers had credit balances exceeding £200[1], casting doubt on the accuracy of the direct debit payments vis-à-vis actual energy consumption. This is despite many families still struggling with their energy bills.

Taking Regular Meter Readings

With energy bills undergoing quarterly adjustments due to price caps, consumers need to be vigilant. Regular meter readings can ensure accurate billing and help save money by controlling energy usage. However, a mere 48% of households without a smart meter adhere to this monthly practice.

City% of Households Providing Monthly Updates

Nottingham stands out with nearly 59% of its households updating their energy suppliers monthly. Meanwhile, Sheffield trails with only 42% doing so.

Smart meter recording electricity usage

Seeking Direct Debit Reviews

For those suspecting inflated direct debits, contacting suppliers for a review is a step forward. Remarkably, over the past year, only 31% of bill-payers have pursued this route.

Time Since Last Review% of Households
More than 3 months45%
Between 4 to 6 months16%
Between 6 to 12 months8%

The table above indicates that 45% of households haven’t had their direct debits reviewed in over three months.

Dwindling Satisfaction with Energy Bills

The energy crisis has left a discernible dent in customer satisfaction concerning billing. While nearly 75% expressed satisfaction in 2021, that figure has nosedived to a mere 60% recently.

Review Frequencies: A Mixed Bag

Energy suppliers don’t follow a uniform pattern when it comes to direct debit reviews. Some undertake this exercise every three months, others biannually, while a few maintain ongoing reviews.

A Call to Action

Given the fluctuating price cap, Uswitch emphasises the importance for energy consumers to be proactive. Keeping tabs on direct debits and demanding reviews when payments seem misaligned with actual usage is paramount.

Natalie Mathie, Uswitch energy expert, said: “Consumers are still paying historically high prices for their energy, so it is crucial that direct debits match usage as accurately as possible.

“Millions of households came out of last winter with high levels of energy credit, suggesting many direct debits are set higher than they need to be. 

“With the energy price cap changing every three months and many people’s finances stretched to the limit, it is vital that customers keep an eye on their direct debits and ask for them to be reviewed if they don’t match their usage.”

Uswitch’s Tips for Ensuring Bills are Accurate 

1. Provide regular meter readings,  if you don’t have a smart meter. This ensures your bills are accurate and makes it easier for your supplier to modify your direct debit to match your usage. 

2. If you are building up too much credit, get in touch with your supplier to ask them to review your direct debit payments. You may also want your provider to return some of the credit. 

3. Check your monthly direct debit payments reflect your annual usage and contact your supplier if they don’t. You can monitor how much energy you are using by using Utrack, a free mobile app that offers regular insights into your energy use and provides useful tips on how to cut bills.

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