
Energy direct debits help
Lower your payments & get money back
Paying by monthly direct debit can cut bills by £100+/yr. Yet direct debits are based on an estimate of your usage. If that's wrong, you can end up overpaying each month. And right now, providers are hugely upping direct debit payments off the back of the recent 54% hike to the energy price cap – so make sure yours is fair.

Many have told us they've seen their direct debits rise by way over the average price cap rise. Of those who replied to our recent survey, at least 30% of British Gas, Octopus Energy and Shell Energy customers who were in credit and on price-capped tariffs told us that they've seen their direct debits double – even though the price cap rise is 54% on average.
Across all firms, 25% of customers in this situation reported direct debits doubling or more. See the results of our energy direct debits survey for full info.
Firstly, key points on energy direct debits
Here are the key need-to-knows about how energy direct debits work.
Know your rights
The regulator's licence conditions set out guidelines for fair and reasonable direct debits. Under condition 27 of the Gas Supply Licence, suppliers must:
Set fair direct debits. They must take reasonable steps to ensure customers' direct debit levels are based on the best available information, including the quantity of gas and electricity supplied.
Give clear explanations. If you ask, your supplier must clearly explain why it's chosen that amount for its direct debit.
Refund credits. If a credit has accumulated and a customer asks for it back, suppliers must refund it. If the supplier thinks the credit should be withheld, the reasons why must be clearly explained but customers can challenge this (see how to challenge it).
In theory, this should make it much easier for consumers to get fair direct debits set for them and reclaim refunds where due. As this is a licence condition, energy regulator Ofgem can fine suppliers if they breach it. Following the record increase to the energy price cap in April, Ofgem is currently looking at whether suppliers have been increasing direct debits by more than necessary, after numerous reports of people seeing their payments go up by double or more.
If you are in credit, many energy companies, including all of the big six, offer automatic refunds when you're in credit (though the threshold for this happening varies). However, in many cases it's still be up to consumers to demand a refund.
Annoyingly, Ofgem doesn't set out what's "fair and reasonable". Instead, it leaves it up to the supplier to decide. If you disagree and the company won't sort out your complaint, you can go to the free, independent Energy Ombudsman to dispute it.
How to fight back
While there are guidelines suppliers must adhere to – and many offer automatic refunds – you could often still have a fight on your hands to get your cash back. After all, while the companies have your money, they can earn stacks of interest. And right now there are fears struggling firms are increasing direct debits to improve cash flow in these unprecedented times for the energy market.
Here's how to make sure you get what you're owed:
Step 1: Always do a meter reading and send it to your supplier

Don't let the company rely on its estimates, that's just a great excuse to set high direct debits. Keep it as accurate as possible. The info on how to read your meter will be on your bill, or look online. Usually you can give readings online, or by calling an automated answer system – or sometimes you can even call up and speak to an actual person.
If you've never given a meter reading before and have been relying on estimates, then do the reading and wait for the updated bill before even attempting to ask to have the debit lowered.
Step 2: If you're heavily in credit ask for your money back
Energy usage is seasonal, so it's expected that between summer and winter, you may have racked up some credit. Yet if you're heavily and disproportionately in credit, then before asking to lower the direct debit, try to get a chunk of the amount you've overpaid back – though remember to factor in price rises and the fact we are heading into the higher-use winter period.
According to Ofgem, suppliers must refund accumulated credit, though it doesn't say how much it thinks is fair.
As the table below shows, many energy companies have payout policies, and the majority issue refunds automatically each year on the anniversary of when you signed up to their tariff (though the threshold for getting a refund varies).
That said, you may still have to chase. If you think you're owed, call and ask for your cash back. Quote condition 27 of the Gas Supply Licence, which states credits must be refunded and direct debits fair. If it won't reset it, you're entitled to a full explanation, and you can complain to the ombudsman.
Providers' refund policies (correct at May 2022)
PROVIDER | ANNUAL CREDIT REFUND POLICY (1) |
---|---|
British Gas | It'll automatically refund you anything over £75. It says it will keep up to £75 in credit on your account to lower your future monthly payments. |
E.on | It will refund any credit you have. You can choose to keep it in your account to reduce your future direct debit. |
Scottish Power | If you're in credit by more than one month's payment value or by over £75, you'll get an automatic refund. If you're in credit by less than this, Scottish Power says you can still request a refund if you provide up-to-date meter readings. |
EDF | Provided it has an up-to-date meter reading, EDF will automatically refund you any in-credit amount above £40. |
SSE | If your account is in credit by more than one month's payment it will automatically refund you everything over this. |
(1) Paid on the 12-month anniversary of when you signed up to the tariff. |

You have a right to ask for an explanation of why your direct debit is set at a certain level, so call up and do it. If you're always in credit and it isn't just seasonal, politely request the direct debit be lowered to reflect your ACTUAL annual usage and meter readings.
It's possible you may have a small debt on the account too. In this case, paying off a £20 debit balance to bring the account to zero is likely to give you more leverage when renegotiating the direct debit. Customer service staff may sometimes be limited in what they can do due to their computer systems, but paying off the debt may give them leeway.
Do remember electricity and gas companies rightly should err very slightly on the side of overpayment rather than underpayment, as otherwise you could get a shock at the end of the year with a big catch-up bill. If you're unsuccessful, see the next step.
Step 4: If they won't budge on the phone, formally request the direct debit's lowered
At this point, you've gone through the usual protocols, and it's here where you have to make it not worth the energy company's time to continue making you overpay.
Writing a formal letter indicates you're taking it seriously and you're unwilling to let it lie. Write to say your direct debit is set too high, it breaks the energy retailers' code, and threaten if there's no change, you'll ditch and switch.
Your credit is protected if your provider goes bust
Over 3.5 million people have been affected by supplier failures since the last September, but don't worry – you're never at risk of losing your energy supply and any credit you're owed will be returned.
Under regulator Ofgem's safety net rules, when a supplier fails a new one is appointed to take over, and once it does you'll usually be moved on to its standard tariff – the most expensive type of tariff.
If your account is in credit when the supplier goes bust, the new supplier Ofgem appoints to take over will either pay it to you – even if you switched away before it stopped trading – or add it to your new account to pay for future energy use once it takes over your supply.
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How to complain about your energy provider
The energy industry isn't known for having great customer service across the board, and while a provider may be good for some, it can be hell for others. Common problems include incorrect bills, switching issues, direct debits being too high, refund delays and more.
It's always worth trying to call your provider to sort the issue first, but if not then you can use free complaints tool Resolver. The tool helps you manage your complaint, and if the company doesn't play ball, it also helps you escalate your complaint to the free Energy Ombudsman.
In the forum: Tell us your energy direct debit successes and discuss energy overcharging.


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