Why energy bills are rising this month despite the postponement of 20% price hikes
Energy bills are rising for many this month despite the postponement of a 20% planned price increase in April. This is largely due to two reasons; firstly, the Government's £66 or £67 monthly support payments have stopped, and secondly, some suppliers are also reviewing direct debit levels at the same time. Here’s what you need to know.
Many confused MoneySavers have contacted us asking why they have had their payments increased, despite the Government keeping the Energy Price Guarantee (EPG) at £2,500 a year for a typical household until July after a successful campaign led by MoneySavingExpert.com and our founder Martin Lewis.
But while the planned increase to the EPG has been postponed (see How the EPG works and what we expect to happen from July), the £400 energy bill support scheme paid monthly to virtually all households this winter ended in March, so we're now seeing the effect of that on bills.
Many suppliers are also reviewing direct debits levels, so you may see payments increase by more than £67 a month if you've used more energy than expected – though if you have been using less energy, you could actually see bills come down (we've info on how it affects non-direct debit customers below).
If you're struggling with higher payments, see our Struggling to pay – energy help guide.
How suppliers are changing direct debits
How you were paid the Government's £66 or £67 monthly support from October 2022 to March 2023 determines how your payments will change going forward. Here's what each firm told us about whether it would change direct debits this month (also see our How suppliers set direct debits guide for full info on direct debit policies).
|How the £66/ £67 a month was paid||Will my direct debit payment change? (1)|
|British Gas||Directly into bank account||No – unless your DD is scheduled for its six-monthly review|
|E.on Next||DDs automatically reduced||Yes – factoring in end of Government payment and any usage changes|
|EDF Energy||Directly into bank account||No – unless your DD is scheduled for its six-monthly review|
|Octopus Energy||DDs automatically reduced||Yes – factoring in end of Government payment and any usage changes|
|Ovo Energy||Directly into bank account||No – unless your DD is scheduled for its quarterly review|
|Scottish Power||Directly into bank account||No – unless your DD is scheduled for its quarterly review|
|Shell Energy||DDs automatically reduced||Yes – factoring in end of Government payment and any usage changes|
|So Energy||DDs automatically reduced||Yes – factoring in end of Government payment and any usage changes|
|SSE||Directly into bank account||No – unless your DD is scheduled for its six-monthly review|
|(1) If your firm reduced your DD automatically, you may not see any change in the DD amount as it appears on your bill, as your supplier may not have changed this amount, it may have just taken £66 or £67 less than this figure each month. So you'll still see a change in how much comes out of your bank, but the figure on your statement might not change.
Note: These are the suppliers' general policies, so do be aware that your direct debit could change differently, depending on whether you're in credit or debt, or if you've manually changed your payment amounts over the winter.
Unhappy with your direct debit? You can challenge it
Under the current energy rules, firms have to set "fair" direct debits and must take "all reasonable steps" to make sure direct debits are based on the most current info available, unless their terms and conditions specifically say otherwise.
So if you think yours is wrong, you do have the right to challenge it. The best thing to do is to submit an up-to-date meter reading, then speak to your supplier and politely ask it to justify the rise. If it can't, request that it is lowered. If it refuses, make a formal complaint and take it to the Energy Ombudsman. For more, see How to challenge your direct debit.
If you're still not happy, don't just cancel it as other payment methods can cost more – see if your supplier offers variable direct debits instead (though first check it's right for you).
'Why have you doubled my direct debit?'
We've seen a number of MoneySavers confused as to why their bills are rising.
If you don't pay by direct debit, the end of the £400 support will still affect you. The scheme worked differently depending on how you paid for your energy:
- If you've a traditional prepayment meter, you will have been sent the £66 or £67 as top-up vouchers each month between October and March for your electricity account (though some suppliers let you add the money to your gas account). The end of the support means you'll need to top up more once your current credit runs out.
Most on traditional prepay should have received all their vouchers by now, but 100,000s remain unclaimed. Each voucher only lasts for three months, but suppliers can reissue them if you've got one that's expired or lost. You can use the vouchers until the scheme officially ends in June. If you've not got everything you're entitled to, see how to claim prepay vouchers for more info.
- If you've a smart prepayment meter, the payments were added to your electricity account – though some suppliers let you move it to your gas account. With the support now ended, you'll need to top up more once your current credit runs out.
- If you pay on receipt of a bill, the money was added to your energy account each month as credit. It's likely your next bill will be higher, depending on how frequently you're billed and how much energy you've used.