Has your energy supplier told you to pay a Direct Debit (DD) amount that sounds wrong?
Not just more than you can afford, but one that doesn’t sound right at all?:
- some numbers seem simply incredible, plucked out of nowhere;
- some seem to ignore the large credit on your account.
You can’t complain if the DD is so high just because prices are high – but you can complain if your supplier hasn’t calculated the DD reasonably.
The issue of too high a DD is often linked to someone having a large amount of credit on their account. Some suppliers let you change your DD amount on their app and also let you ask for credit to be repaid. But these don’t always seem to work.
Contents
What is happening to prices and your bills
Changing prices
The Ofgem price cap in July was about 17% lower than the government’s Energy Price Guarantee, which ended at the start of July. And prices fell about another 7% in October.
But energy prices will be going up again by about 5% in January 2024.
The £400 off electric bills help has ended
A complicating factor is that the government provided £400 of help with electric bills over last winter. That was roughly £66 a month but different suppliers gave it in different ways:
- some took your direct debit for the full amount as normal and then refunded you £66 a month to your bank account. This includes British Gas, E.ON and E.ON Next, EDF
- others reduced your DD by £66 a month. This includes Shell Energy, Utilita, Utility Warehouse, Octopus, Bulb, Scottish Power.
If your supplier reduced your electric bills so your DD was lower, you will have seen the Direct Debits increase from April 2023 as the £66 deductions have ended.
Your supplier has to explain how the DD figure was calculated
If you don’t know why the Direct Debit is so large, ask your supplier for a breakdown of the number. This explanation should be in plain English. If they won’t do this, send them a formal complaint.
The explanation should include the amount of energy they expect you to consume, the price for the energy you will be paying, and any credit you currently have or any arrears that you owe at the moment.
The supplier should give you details of any meter readings that have helped them arrive at their estimate of the energy they expect you to consume. And if you are being asked to repay arrears, they should say how much you have to pay each month to these.
Does the expected energy consumption look reasonable to you?
Can you check against previous usage?
If you have been living in the house for over a year, you can compare the meter readings with your bills to check they are correct.
Also check your current meter reading. If that is less than the energy company says it is, they will think you are using more energy than you are. This may explain why the direct debit proposed is too high.
This could be because the energy company is using an estimate or the meter was misread. Tell your energy company the current reading and offer to provide a photograph of it.
Ask them to provide a new direct debit calculation based on this amount. The supplier has to base their DD calculation on the “best and most current information available to them.”
Is there a problem with your meter?
Meter problems are rare but they can happen.
If you are worried about this, read Check if your energy meter is faulty. That gives details of a quick check you can do and explains how to get your supplier to check the meter.
If you have a smart meter, you can also check it is sending in your readings automatically, see Check your smart meter’s working in smart mode.
Will you use less energy in future?
A DD is meant to smooth out your payments over the year. You should expect to pay more than you use for the summer months, and less than use for the winter months. So just because it’s summer, your DD shouldn’t be reduced because of this.
If your household has changed – kids left home, no one at home during the day – then this is likely to reduce your usage. If you have more insulation, had double glazing fitted, are stopping using your tumble drier as much, or are planning similar ways to cut your bills, this should also help.
Your supplier may want to see proof of how much your bills are dropping, not take your word for it.
Start taking regular meter readings monthly from now on. Then you can compare your current usage to the same month last year.
Your supplier should then use this to set a Direct Debit amount that reflects your reduction in consumption.
If your supplier refuses to take lower usage into account until you have a full 12 months of data, you should complain, see below. That is not taking into account the “best and most current information available to them.”
If you cannot afford the high DD while complaints are going through, think about switching to paying the monthly bill instead. But it is cheaper to pay by Direct Debit. And a DD also avoids the high bill spikes in December-March. So a direct debit is generally preferable as a long-term way to pay.
Have you recently moved in?
In this case, your supplier will base its guess on the previous occupant’s energy usage. This could be way too much if you have a much smaller household, or everyone is out during the day, and you don’t have a pottery kiln in the garage…
If it’s a new build, your energy company will make a guess based on the size of the house.
You can explain this to your supplier. If they won’t change the direct debit now, say you want to pay the monthly bill for the next few months. After that, you can ask them to come up with a more reasonable direct debit based on your actual usage.
Complain if your supplier refuses to change the DD amount
If a supplier won’t change the DD when you have provided reasons and proof of what you are using, you can make a formal complaint to them. You can’t complain because the prices are too high, but you can complain if the DD hasn’t been calculated properly. Or if your supplier is trying to make you repay the arrears at a rate you cannot afford.
When a supplier rejects a complaint, they should send you a “letter of deadlock” and you can take your complaint to the Energy Ombudsman.
If you haven’t received a response in a month, chase it up. If you haven’t received a response after 8 weeks, you can send the complaint to the Ombudsman at that point.
Do you want some credit to be repaid?
With interest rates on savings now much higher, many people want their credit sitting in their bank account earning them interest. Ofgem figures showed that energy suppliers had more than £8billion of credit on customer accounts in October 2023.
The seasonal cycle of energy usage means that you want to have a very low amount of credit in April or May each year and then build up credit during the summer until October, when the heating goes on and your monthly usage starts to rise.
So if in May you are looking at a sizeable amount of credit you can ask for this to be returned. Or if in October you have a large amount but your energy supplier is refusing to reduce your direct debit, you can ask for some of it to be returned.
If all else fails, you can always change suppliers – then the credit has to be refunded to you!
Get help with this
You can get help with problems with energy bills, including issues with a direct debit, from your local Citizens Advice.
They can also help if you are being asked to pay too much to energy bill arrears, advise on other debt problems and see if you are entitled to any extra benefits.
Pay on the monthly bill, not by DD?
Could a Debt Relief order help you?
Options when cards are maxed out
Peter Thompson says
I have had 2 emails from Scottish Power saying my Electric metre is 15 yrs old and needs to be replaced with a smart meter. I will wait for there apology for sending this, but won’t hold my breath.
Sara (Debt Camel) says
Indeed.
Unless you are 100% sure that you will be able to manage your energy bills over the next couple of years, however much they go up, I suggest you should say you do not want a smart meter. Because it is simple to change a smart meter into a prepayment meter… much simpler than to get a prepayment fitted if you do not have a smart meter…
Tina Hartfield says
Yes I agree I am having same problem joined octopus energy beginning of year I was paying monthly then bam I received a bill for 700 pound there saying it was because they never charge me as the new meter was not corresponding now there asking me to 340.00 plus clearing the debt off so I be paying 400 quid basically but I don’t have that sort of money I was not in debt when I joined now I am in debt
Sara (Debt Camel) says
You can go back to Octopus and ask to repay the arrears at an affordable rate, not all at once. Ask Citizens Advice for help with this if octopus won’t agree to reasonable monthly repayments.
Gary says
Interesting ..we have had a brand new Baxi Boiler this Summer replaced a 14 year boiler and having a dual fuel wood burner fitted in the Living room.next week our plan is not to use the boiler for heating this winter maybe half hour in morning our old Victorian terrace was once heated without gas and seems like we moving back.to Victorian times this article is suggesting that we have to send photos as evidence of new boilers or burners to reduce DDS on last year’s consumption really
Sara (Debt Camel) says
You can tell your supplier that you have a new wood burner and are expecting to reduce your use of gas for central heating considerably. But start taking regular weekly readings of your meters, so the evidence starts to accumulate.
Alexandra says
I’ve moved out and a month before the moving an unannounced Bulb technician came and got the reading. The meter is either broken or downright an unsolvable mystery because three numbers keep changing, they of course went for the highest. In September I received a notification I was 700 in debit and on the same month when I terminated my account I was told I’m 1120 under. I’m trying to argue the numbers are faulty, asking for a breakdown and not getting any reply
Sara (Debt Camel) says
There is a link in the article above for what to do if you think your meter is faulty.
Martin says
British gas increased my payments to £219.39/month.
I had built up a surpless credit of over around £200, but British Gas are still saying “We recommend you should change to £245.66 a month to stay on track”.
Their estimates and my own estimates agree that that my extimated usage for electricity and gas over the next year is approximately £2000/year or £167/month.
I don’t understand how British Gas’ system is calculating these Direct Debit amounts.
Sara (Debt Camel) says
Then ask BG to explain how they have calculated it. And put in a complaint if either they won’t explain this OR the numbers look wrong when they do.
Hugo says
might it just be that knowing there are further increases in the pipeline the energy supplier suggests a higher payment level so that once the next cliff edge approaches and then arrives people might have a further surplus to take the Edge off the new extra required money. Giving people the lowest possible payment level would leave them with arrears and the increase to face being prudent is looking after the user as well as making sure the provider also stays in business. As they say being cruel to be kind. Telling people’s unrealistic low payment amounts leads them into a false position
Sara (Debt Camel) says
Who knows? If that is what a supplier is doing, then it needs to explain it…
A supplier has a duty under Ofgem’s Supply Licence Conditions to use “the best and most current available information” to set a DD. Thinking prices will go up next year doesn’t count!
Mike Dennis says
Rather than pussyfooting with comments between consumers and suppliers we all should understand that the retailing of electricity is fundamentally flawed.
Operated by questionable individuals and companies many of whom have vanished with fortunes and others have grown very large and become multimillionaires in very short time.
Martin Lewis said recently that electricity companies together hold a continuous approximately 7 billion of clients money if normal businessman have access to this level of credit they would be over the moon but electricity companies are not subject to the normal vicissitudes of business they have confirmed regular income they
have no credit chasing with a direct debit system and furthermore they have no accountability with a direct debit system and they require no sales people because universally they have a locked in cohort of users.
What is required is an organisation with impeccable integrity that monitors every single electricity bill in In the country to claw back some of that 7 billion and to speak for the tragic and unfortunate people of our country who are being exploited.
Gareth says
e.on estimate my annual electricity usage to be £400 but have increased my DD to £176 a month even though I’m in credit of £150.
I emailed them saying this was wrong and to get a breakdown of how this was calculated.
They apologised and said they had changed the DD to £40 a month.
I logged on to give my meter reading and found the DD hadn’t been changed so I’ve cancelled the DD with my bank.
I’m sick of this nonsense!
Sara (Debt Camel) says
I suggest you switch to a different supplier. None of them are [perfect, but I see fewer complaints about octopus than the other large supplier.
Andrea says
Eon Next send me Increased DD starting from May 2024 for nearly £800
Sending rebilled email for gas usage only as this seems to be problem .
They stated that from 1st 2023 until 15th of March 2024 I have used gas for£2189.51 with dates .First 3 months of this is estimated usage worth £869.I have divided this by 12 months without first £869 ,and that should be price for each month for last year.About £183
Electric is approximately £137 per month
That shouldn’t be £319 I should pay for my energy usadge.
9 months ago they send me a bill £2084 debt because they said that they take only estimates I have complained about it but without success and make a payment plan to clear this off with in 18 months.I have paid over £400 add since then and paid back over £1000 leaving me with £1000 more to pay over next 8 months or so.Now they another increase for £800 breaking agreement of £400.
Plus I should pay £350 per month according to my calculations to pay for energy usage and debt.
I have raised complaint about it stating “I like to make complain about changing my direct debit ,inaccurate bills and statements.Because they keep sending bills with estimated usage for gas over£9190 annually and that have been pushed up by their colleague over the phone as complaint ,but no change.I have also contacted energy ombudsman ,with their response that I have to have deadlock letter or final response.Hope this makes sense.
Sara (Debt Camel) says
I think you need some help with this. I suggest you contact your local Citizens Advice as soon as possible
Andrea says
Thank you .
Citizen advice it’s really useless ,it just make me feel
complete worthless .There is no help what so ever there.
I have complained today to Eon Next and send them email.See what happens.
It’s clear that eon Next have some serious problems there charging and manipulating with people’s money.
I mean they actually asking for £800 monthly?
Thank you for responding though..