Martin Lewis explains how to reclaim £100s from your energy supplier

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MARTIN Lewis has explained how you could claim back hundreds of pounds from your energy supplier.

The MoneySavingExpert said payments could be due if your gas and electricity firm has overestimated how much you should be paying.

Martin Lewis speaking during his ITV Martin Lewis Money Show

Speaking during his Martin Lewis Money Show on ITV, he explained how most energy firms estimate how much you should be paying and then divide this amount by 12 to cover the year.

But in some cases, Martin says these guesses can be “widely wrong”.

In fact, the money guru revealed how one person who tweeted him was in credit of more than £900 to their energy supplier after overpaying for 11 months.

If you’ve been paying too much, and you’re in credit to your supplier, you are entitled to ask for that money back.

But there may be some scenarios where you want to hold off on getting a refund straight away.

This is because you’ll pay higher bills some months to help smooth out more expensive energy-use periods later in the year.

Martin therefore recommends asking for a refund if you’re in credit worth more than one month of your usual payments.

He said: “If you pay by monthly direct debit, you’ll know that’s for them to smooth your bills out.

“What they usually do, although not in every case, is they work out how much you pay a year, divide it by 12 and that’s what you pay – but these can be widely wrong.”

Martin continued: “In most cases, the rough rule of thumb is if you’ve got one month of payment in credit it’s probably too much.”

Martin explained how you’ll naturally be in credit and debt over the year

How to claim back £100s from your energy supplier

First, make sure your energy firm has the most up-to-date meter reading.

If your reading doesn’t match the energy use they have down for you, chances are they’ll want to update your monthly bills as you may not be paying the right amount anyway.

But if your meter readings are up-to-date, you can check if you are in credit or debt to your energy supplier.

You should be able to do this by finding your latest bill, checking your account online or by phoning your supplier.

If you’re in credit worth more than one month of your usual payments, and you want your money back, ask your energy firm to return the funds.

How much credit you’re in likely depends on your energy cycle, as you’ll typically be in credit for part of the year, and in debt for other parts.

This is because energy firms usually estimate your monthly use, but there will be times – for example, during colder months – when you’ll use more energy.

As an example, using data from energy firm Octopus Energy, Martin explained that a household whose bill cycle starts on January 1 will typically build up debt all the way until the start of May.

You would then start to build credit until around November, when you’ll then start to fall into debt again – so paying slightly more on some months balances this out over the year.

If you’re in debt to your energy supplier

If you’re in debt to your energy supplier, you should increase your monthly payments to reduce the amount.

Martin explained how being in huge amounts of debt could stop you switching supplier and you could end up paying a large lump sum to clear the amount.

If you’re really struggling, and you can’t pay your bills, speak to your energy firm as soon as possible.

They should be able to come up with a payment plan to help you pay off your bills at an affordable rate.

If your claim benefits, you may also be able to pay off your debts through the Fuel Direct Scheme.

A fixed amount will automatically be taken to cover what you owe plus your usage.

To be eligible, you must be getting one of the following benefits:

  • Income-based jobseeker’s allowance
  • Income support
  • income-related employment and support allowance
  • Pension credit
  • Universal Credit (but only if you’re not working)

If you cannot come to an agreement with your supplier, they may try to force you to get a prepayment meter installed.

In very rare cases, where you refuse to negotiate, your supplier might threaten you with disconnection.

The warning from Martin comes as energy bills are due to jump by £171 for half a million households.

Regulator Ofgem has proposed a £21 increase to the default energy price cap from April.

The price hike warning comes as experts also say working from home due to the pandemic could add £45 a month to energy bills.

Did you miss our previous article…
https://www.hellofaread.com/money/create-a-man-cave-or-a-space-for-mum-to-relax-on-the-cheap/