How to avoid being overcharged on your energy

If you think you’re being overcharged by your supplier, you’re not alone. But how can you tell?

Tip #1: Read your energy meter

The simplest way to avoid being overcharged by your supplier is to make sure you give them absolutely no reason to estimate.

Estimating your energy bills gives suppliers every incentive to overcharge you — and even charge you in advance for energy you haven't yet used — to ensure you don't fall behind on your payments.

Luckily, stopping estimated billing is as easy as reading your meter regularly and updating your supplier. Too many of us only ever submit meter readings when we move into or leave a property, but it is far better to submit at least four meter readings over the course of a year – about one every three months.

For standard meters, just read the numbers on your meter, noting down all numbers except those highlighted in red or after the decimal point, and record the date.

Submitting your reading varies from supplier to supplier, but most of the big suppliers let you submit your meter readings online or using smartphone apps, making it easier than ever.

Those already using smart meters don't have to worry about estimated billing as the energy supplier can track your exact usage and bill accordingly.

All UK homes should be offered a smart meter by the end of 2025, so in the future, bill estimation should be a thing of the past.

If you're not sure whether your supplier uses estimated billing, just look for the word 'estimated' on your bill, or call your supplier.

Tip #2. Just say no to exit fees

Falling victim to the dreaded exit fee is one sure way to end up paying too much for your energy.

Exit fees are used by energy suppliers to ensure you stay with them for a fixed duration — just like a penalty fee on a mortgage. They are usually applied to fixed-rate tariffs, where you receive a fixed rate for a given period of time. However, exit fees may also apply to variable tariffs, so make sure you read the fine print before signing up for a new deal.

Exit fees allow suppliers to guarantee a fixed number of customers for the duration of a plan, so they can calculate how much to charge on that plan to make it both competitive and profitable. However, exit fees limit your options when it comes to switching away, particularly during a price cut.

Uswitch will list the exit fee (also referred to as a cancellation fee) in the plan details section of your comparison results, so you should calculate this cost when considering whether to switch. For example, a plan without an exit fee may be a better bet over the long term, even if it is more expensive now.

It is worth noting that energy companies are not allowed to charge you exit fees or any other financial penalty in the event of a price increase. If your supplier tries to charge a fee or, if you want to move supplier, charge you at the new higher rate until you have switched, you should complain.

Tip #3. Compare energy prices

Another sure way to be overcharged for your energy is when you don't shop around and switch when possible.

Energy suppliers rely to a large degree on customers who don't search the markets for cheaper deals, even though their prices are going up. Two identical homes, using identical energy, can easily be paying very different amounts for their energy due to the supplier they are with, or the tariff or plan they are on.

While switching hasn't been possible for the past couple of years, deals are starting to return to the market. While it may still be cheaper for some customers to remain on a standard variable plan rather than switch to a fix, it's worth running an energy comparison just to be sure.

Tip #4. Don’t put off switching

Too many consumers think of switching energy supplier as a difficult and lengthy process that will end up costing them more, but that isn't the case.

More than 200,000 people have switched over the summer of 2023 as deals return to the market using just their postcode and plan name. Switching might not be right for everyone but as mentioned above, it's certainly worth comparing energy to see if there's a deal that works for you.

Tip #5. Complain, especially if you get a big bill

If you feel your energy supplier is overcharging you — if you receive a particularly large bill after a price rise or a large estimated bill — you should contact your supplier to ask about it.

Your supplier is obliged to treat your complaint fairly by the energy regulator Ofgem, but if you are still getting nowhere don't give up. If you don't get a response within eight weeks you can take your complaint to the Energy Ombudsman, which will look into your dispute. For more about this, see our guide on how to handle complaints about your energy supplier.

Follow this advice, and you should never be overcharged for your energy again. It pays to make sure you are getting the best deal on energy.