A man revealed how a tip from Martin Lewis led to him and his partner getting a £4,000 credit refund from their energy supplier – and all it took was a phone call. The MoneySavingExpert.com founder discussed energy bills on ITV‘s Martin Lewis Money Show Live ahead of the Ofgem price cap being announced for July next week.
Mr Lewis said now is an ideal time to check if too much credit has built up on your account. This can occur for various reasons, but usually because unused credit builds up during the summer when your energy usage is low to help you pay for it in winter, when it’s higher. And while it’s important to have a buffer to support you over the colder months you may have far more credit that you need. The personal finance guru says the best situation is to have no more than a month-and-a-half worth of direct debits in credit in your account in May.
Mr Lewis says if you have an amount of credit over this, you should consider asking for some of it back, which can be done by contacting your supplier.
“The basic pattern is, over those winter months, you use your credit or you build up debt, depending where you are,” he said.
“That bottoms out just around May… and then you start to build up credit until it peaks in November. If you’ve got a lot of credit right now, this is the point where you shouldn’t have a lot of credit – which is why this is the perfect time to be checking.
He added that his rough rule of thumb is that if “have more than a month and a half worth of direct debits in credit right now, I would want it back”. “So if you pay £200 a month, you got £300 in credit, that’s fine – but £500, I’d want £200 back,” Mr Lewis added.
Couple Jill and Brian shared their experience of discovering a huge amount of surplus credit had accumulated. They decided to look into it after watching an episode of the Martin Lewis Money Show in November last year.
It turned out they had been paying too for years, and thousands of pounds were just sitting there. Jill said the pair were paying around £216 per month, “which to me seemed extraordinary”, as per The Mirror.
Brian, who is responsible for energy bills, added: “When I phoned the energy provider, they actually went back and checked and we’d been overpaying for three years. There was £4,500 in credit. I left £500 in the account so we ended up with a £4,000 refund.”
The personal finance tip comes as energy bills are forecast to increase by more than £200 a year for the typical household from July, with an update from Ofgem next week.
Cornwall Insight expects the the regulator’s energy price cap will increase to £1,850 this summer, 13% more than the current £1,641 annual bill.
Ofgem will announce the July price cap on May 27. It will remain in place until October.