12 million homes owed £1.5 billion by energy suppliers
Energy suppliers owe 12 million households a total of £1.5 billion – 15% (£200m) more than the same time last year
Almost half (45%) of UK homes could reclaim an average of £126 each but nearly one in 10 (9%) could be due a rebate of over £200
55% of those owed money still have to chase their supplier instead of receiving an automatic refund
But 4.1 million households are in debt to their supplier after the winter, by an average of £122 each
Consumers can spring clean their finances by reclaiming their credit and then switching to a cheaper energy deal – leaving them up to £500 better off
Uswitch.com calls on all suppliers to offer automatic refunds on accounts more than one month in credit, and regularly review customer accounts.
More than 12 million households (45%) could reclaim £1.5 billion from suppliers for energy they paid for but didn’t use this winter, according to new research from Uswitch.com, the price comparison and switching service.
On the other hand, 4.1 million households (15% of bill payers) have found their accounts in debt following the winter. This is one million more than were in debt last autumn 2018, but more consumers would expect to owe money to their supplier at this time of year and then build up credit during the summer.
Credit levels are 15% higher today than they were at the same time last year, with consumers collectively owed an extra £200m. Not only are individual households owed more, but there are also an additional 1.2 million in credit across the UK compared to 2018.
The average household in credit with their energy supplier stands to reclaim £126, but nearly one in ten (9%) has over £200 sat in an energy company’s bank account.
Recent declines in the wholesale cost of gas and electricity have led to a deluge of cheaper deals becoming available which are hundreds of pounds cheaper than poor value Standard Variable Tariffs (SVTs). On average, customers on SVTs priced at the level of the price cap could recoup almost £500 by reclaiming their credit balance and then switching to the cheapest deal available, according to Uswitch.com.
Credit levels vary across the country, from an above average £161 for Glasgow residents to a modest £68 for those living in Southampton. The city with the highest proportion of residents owed money by their energy company is Newcastle-upon-Tyne, where 58% say they are in credit by an average of £113 each. Leeds has the fewest households who have built up a surplus on their energy bill, where 36% say they are owed £134 on average.
Consumers who chose their own deal are more likely to be owed money by their supplier. 50% of people who chose a fixed deal have £119 credit on average, while 53% of those who chose a variable tariff are in credit by an average of £167. This compares with 43% of households on default or ‘Standard Variable Tariffs’, who are in the black by an average of £120 each.
Customers who pay by Direct Debit normally expect to accrue credit in the warmer summer months but spend it over winter when they use more gas and electricity. The wholesale cost of gas and electricity rose in 2018, meaning price hikes for consumers on variable tariffs and the cheapest fixes becoming more expensive in the second half of the year. However, a milder winter, including the second warmest February on record, meant that consumption may well have been lower than last year, and contributed to the increase in credit levels.
Despite more people being in credit, over half (55%) of bill payers still have to chase their supplier for the balance owed to them. Three of the big six suppliers refund credit balances automatically. Other companies require customers to call, go online or fill out a form.
Uswitch is calling for all energy companies to review account balances more regularly, and automatically refund any accounts if they are more than one month in credit or reduce monthly direct debits. Some suppliers refund credit balances once a year, but this may be subject to a minimum amount and policies vary between providers. Under Ofgem rules, customers are entitled to be repaid any credit on request and suppliers must explain if they think there is a valid reason not to.
Rik Smith, Uswitch.com energy expert, says: “Following a mild start to the year, many people find themselves in the enviable situation of being owed money by their energy supplier, instead of the other way around. For consumers, now is the time to spring clean your finances by reclaiming any credit you’re owed, and checking to see if you could be on a better deal.
“However, the energy industry could make things far easier for those who find themselves in credit. While some energy companies already have good systems for refunding customers, it should be standard practice across all suppliers to review accounts regularly and provide the option of automatic refunds or reduced payments for those more than one month in credit. People shouldn’t have to chase to get their own money back.
“The average credit balance is £126. Add that to the amount of money you could save by switching away from a poor value standard deal, and your household budget could be almost £500 healthier for just a few minutes work.
“And even if you owe your supplier money – which isn’t uncommon at this time of year – you can still check whether your supplier has a cheaper tariff you can switch to, meaning you can pay less for your energy and start to reduce the amount you’re in debt.”
Table 1: How to reclaim credit from energy suppliers
| Supplier | Average amount customers say they are in credit** | Percentage of customers who say they are in credit** | How to reclaim credit | ||
|---|---|---|---|---|---|
| British Gas | £137 | 39% | Credit will be if over £75 after one year, as long as a meter reading has been provided. If your account is less than £75 in credit, you can still request a refund. | ||
| E.ON | £97 | 40% | Customers can but a meter reading will need to be provided and future Direct Debit payments may need to change. | ||
| EDF Energy | £139 | 52% | Customers paying by cheque, debit or credit card will need to fill out a refund form. Those paying by direct debit are more likely to have their regular payments amended according but can still via the ‘Contact Us’ section of the EDF website. | ||
| SSE | £85 | 42% | A meter reading will need to be provided and a customer will need to . | ||
| ScottishPower | £154 | 41% | If a customer’s annual review is based on actual meter readings and the balance is greater than one month’s payment or over £75, the balance will be . If customers wish to request a refund outside of their annual review, they will need to provide a meter reading. | ||
| Npower | £157 | 43% | At a customer’s annual review, credit of £5 or more on either gas or electricity accounts will be as long as a meter reading has been provided. If there’s less than £5 credit, it will be put towards future payments, unless a customer requests it to be refunded. Customers can call at any time to discuss a credit refund but a meter reading will need to be provided. | ||
| Ovo Energy | £171 | 53% | You can if your balance is £25 – or more – higher than one month’s Direct Debit. A recent meter reading will need to be provided | ||
| Shell Energy (formerly First Utility) | £149 | 54% | Customers in credit can request a refund, although Shell Energy that credit levels may vary throughout the year. If monthly payment amounts are too high, Shell will recommend reducing the regular payment. | ||
| Co-Op Energy | £156 | 69% | A meter reading will need to be provided and a customer will need to fill out a . | ||
| Octopus Energy | £83 | 51% | Customers can emailing hello@octopus.energy. | ||
| Bulb Energy | £106 | 43% | If a customer’s account is in credit by more than their monthly payment amount, they can email help@bulb.co.uk to . A meter reading will need to be provided. |
Source: Uswitch.com correct as of 15 April, 2019
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Notes to editors
Research was conducted online by Opinium between 5th and 9th April 2019, among 2,009 UK energy bill payers.
When asked ‘Thinking about your most recent energy bill from your supplier, which of the following best applies to you?’, 45% were in credit to their supplier (compared to 40% in 2018) and 15% were in debt to their supplier. 27.2 million households in the UK (source: ONS). 45% of 27.2 million = 12,171,628. 15% of 27.2 million = 4,115,879. The mean amount of those in credit was £126.25. The mean amount of those in debt was £121.79. £126.25 x 12,240,000 = £1,545,300,000. Uswitch.com energy credit research 2018 (£1.3bn), Uswitch.com energy credit research 2017 (£1.3bn), Uswitch.com energy credit research 2016 (£1.5bn). £1.5bn - £1.3bn = 200m. £200m is 15% of £1.5bn. 12,171,628 (2019) – 10,991,910 (2018) = 1,179,718. Uswitch.com energy debt research 2018 (three million households in debt)
When asked ‘Thinking about your most recent energy bill from your supplier, which of the following best applies to you?’, 4% said ‘In credit between £201 and £300’, 3% said ‘In credit between £301 and £500’, 2% said ‘In credit more than £500’. These percentages added together = 9%
When asked ‘Has your energy supplier ever automatically refunded credit back into your account?’, 55% said ‘No’
The cheapest tariff on the market today is £880 (Outfox the Market, One Variable 4.0), which is £374 cheaper than the average SVT priced at the price cap (£1254). The mean amount of those on an SVT in credit was £119.80. 358 + 119.80 = £493.80
When asked ‘Thinking about your most recent energy bill from your supplier, which of the following best applies to you?’, the mean amount of energy credit for those in Glasgow was £161.46 and £67.86 for those in Southampton. 58% of those in Newcastle-upon-Tyne were in credit to their supplier (with a mean amount of £112.93) and 36% of those in Leeds were in credit to their supplier (with a mean amount of £133.70)
When asked ‘Thinking about your most recent energy bill from your supplier, which of the following best applies to you?’, 43% of those on a standard variable / default tariff were in credit to their supplier (with a mean amount of £119.80), 53% of those on another variable tariff chosen by them were in credit to their supplier (with a mean amount of £166.79) and 50% of those on a fixed tariff were in credit to their supplier (with a mean amount of £119.08)
Cheapest deal as at 1 July 2018: Utility Point ‘Flexi Online Tracker 18 Wk24 Direct’ - £797/year (variable). Cheapest fixed deal as at 1 July 2018: Utility Point ‘Just Up 18 Wk24 Direct’ - £820/year.Cheapest deal as at 1 December 2018: People’s Energy ‘The People’s Tariff’ - £946/year (variable). Cheapest fixed deal as at 1 December 2018: Toto Energy: ‘Toto Online Fixed Saver’ - £980/year
Winter 2018/19 temperatures: https://www.metoffice.gov.uk/climate/uk/summaries/2019/winter
See Table 1 in release. Information on supplier’s refund policies taken from their websites on 15 April, 2019
https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/understand-your-gas-and-electricity-bills/energy-bill-credit-explained: “If you’re concerned about the size of your balance, you can ask your energy supplier to refund it to you. Suppliers must do so promptly, unless there are reasonable grounds not to.”
See Table 1 in release. Respondents were asked ‘Which energy supplier are you with? If you are with a different supplier for gas and electricity please think about the one you spend the most with.’ Answers were cross referenced with their credit amount and the number of people in credit with each supplier.
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