Households are being urged to get their money back (Image: Getty)
Customers of major energy firms including British Gas, Octopus Energy, E.On, EDF and OVO are being urged to get as much as £500 of their own money back before bills explode in July.
Despite worries about rising prices and a winter of snow storms, more than half of UK households have credit on their energy account this April, according to comparison firm Uswitch.
The average UK home has nearly £200 of credit, but almost 1 in 20 have more than £500 in credit, USwitch said.
Households should ideally end the winter with little to no credit, having used it during the colder months. They should rebuild their credit during the spring and summer when energy usage is generally lower, in a phenomenon Martin Lewis has dubbed ‘the direct debit cycle’.
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He has always advised that households with more than two months’ credit should ask for any excess beyond two months’ worth to be returned to them from their supplier – because it’s better off earning interest in your bank account than your energy firm’s.
Uswitch says 16 million households (57%) have credit with their energy supplier at the end of this winter, according to its survey.
Uswitch said 63% of households on fixed deals were currently in credit, compared with 56% of those on standard variable tariffs.
One in 10 consumers (12%) have balances over £300, and 4% are more than £500 in credit.
Three in 10 households with credit (31%) intend to ask for some or all of it to be refunded, but 63% plan to leave the money with their supplier to try to reduce their monthly payments.
Just 7% will ask their supplier to return their full balance, while a quarter (24%) will ask their supplier to return some of it, the poll suggests.
Uswitch said it advised consumers to keep around two months of average monthly payments as credit in their energy account to guard against higher costs in the coldest months of the year.
It also urged households without a working smart meter to regularly supply meter readings to keep their account balance and direct debit level accurate to avoid overpaying.
Household energy prices fell by 7% from April 1 in a “short-lived respite” for households already braced for a predicted 18% hike from July.
Ofgem’s price cap dropped from £1,758 to £1,641 – a reduction of £117 or around £10 a month for the average household using both electricity and gas.
This is an 11% fall year on year, but still £600 more than bills were in the winter of 2020 to 2021.
The reduction is lower than the average £150 cut to bills pledged by the Chancellor in November, when she moved 75% of the cost of the renewables obligation from household bills onto general taxation and scrapped the energy company obligation (Eco) scheme.
And it comes amid increasing concern about the amount energy bills could rise by from July as a result of the Middle East conflict, with latest predictions from Cornwall Insight suggesting this could be 18% or £288 a year – to almost £900 above pre-crisis levels.
Uswitch energy spokesman Ben Gallizzi said: “More than half of UK households are coming out of the coldest time of year with credit in their energy accounts.
“At this time of year households should generally have used up most of their credit over the colder winter months. However, it is advisable to keep about two months’ worth of payments in energy credit to cover higher winter bills ahead.
“With energy prices predicted to rise in July, households with more than two months of energy credit could consider leaving some of it with their supplier to take some of the sting out of winter bills later this year.”