Finance expert Martin Lewis says energy firms may owe you money
Brits have been encouraged to check immediately whether they’re entitled to hundreds of pounds. According to financial expert Martin Lewis, this represents the “perfect time” to reclaim your money.
In a video posted to his website Money Saving Expert (MSE), Martin revealed that energy companies are “sitting on” more than £3bn of customers’ cash. This stems from people effectively overpaying through their monthly direct debits, causing credit to accumulate.
He stated: “If you pay your energy bills by monthly direct debit, this is the perfect time to check whether you are in too much credit. Energy firms are sitting on over £3 billion of our cash and you can get it back.”
Martin advised viewers that now represents the optimal moment to investigate this matter. He went on: “So why right now?
“Well, at the beginning of May, we are at the bottom of the curve in the energy direct debit cycle. That means this is the point of the year when you should have the minimum amount of credit. So go and have a look what credit you’re in.”
Before taking any action, you’ll require your most recent meter reading. “Make sure you’ve done an up-to-date meter reading, or you’ve got a smart meter doing that for you and that’s being factored in,” he said.
READ MORE: Martin Lewis explains ‘safest’ payment method for UK tourists after Booking.com questionREAD MORE: Martin Lewis Ryanair, easyJet, Jet2, TUI booking warning over cancellation mistake
“Then, assuming your direct debit is about right, what I would suggest if you have any more than a month and a half’s worth of direct debits, that’s too much. So suppose your direct is £200 a month.
“If you’ve got £600 – a month and a half worth is 300 quid, so I’ll be getting in touch with them saying, ‘Why am I so much in credit?”
‘Please can you give me back the £300 of my money that you’re sitting on?'”
On a separate section of his website, Martin offered further explanation about why this occurs.
He explained: “To set your monthly direct debit, most firms take your annual cost and divide it by 12 (a few do it seasonally), aiming to smooth things out so you avoid high-use winter bill shocks. It’s a good budgeting concept, one I’d probably call for them to introduce if it didn’t exist, as long as you understand.”
He continued: “Monthly direct debits are based on an estimate of usage. If the estimates are wrong, which is common, they can leave some unnecessarily overpaying with too much credit or others getting into too much debt.”
For additional details, visit the MSE website here.