Millions of gas and electricity customers who have overpaid their bills are owed on average £84.80 by their supplier, according to new research** by weflip, the automatic energy switching service.
The research reveals that 51% of UK households have overpaid their energy by on average, £84.80, while 12% of customers have made overpayments in excess of £100. Collectively, it means energy companies are benefiting from a whopping £1.17bn of their customers’ money.
Paying by direct debit (DD) is the most convenient ways for most householders to settle their energy bills. DD payments spread the cost evenly across the year, and most energy companies offer a discount for customers paying in this way. However, energy suppliers base DD payments on their estimate of a customer’s usage over the year. Customers’ actual usage may differ significantly. Overpayments arise when providers overestimate usage and set DD payments at a higher rate than the energy is consumed.
There are several options open to customers who find themselves in credit with their energy supplier. But, before contacting their provider they will need to take an up-to-date meter reading.
Customers can leave the overpayment on their account to offset against future bills, 44% of the customers surveyed take this approach. Or they can ask their supplier to adjust their direct debit payment in line with their actual consumption. Just over a fifth (21%) of people surveyed had asked for their DD to be reduced.
Customers are also entitled to ask their energy provider, at any time, for a refund (just 12% of the survey participants had requested overpayments to be refunded). Providers must refund credits whenever they are asked to, unless there are reasonable grounds not to do so.
Alternatively, customers who hold a positive credit balance can wait until their account comes up for its annual review. Energy suppliers are obliged to review DD accounts once a year, but some do it more frequently. The purpose of the review is to check whether payments need to be adjusted depending on usage. Refund policies for the big six energy providers (British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE) can be found on Ofgem’s website***.
Commenting on the research, Amanda Cumine from weflip, said, “Direct debits take the faff out of paying utility bills, but the way they are calculated can leave many customers out of pocket. While some people will be happy to carry a small surplus to offset higher winter bills, millions more would rather the money was sitting in their bank account rather than that of their energy provider.
“Suppliers calculate customers’ bills by estimating their annual energy consumption then dividing this into 12 equal monthly payments. However, energy usage can change with seasonal variations in the weather or if your domestic situation alters. While providers are required to automatically refund a surplus, they may only do this at the anniversary of your contract and if you provide a meter reading.
“If your account is significantly in credit you should always request a refund as soon as possible and ask your supplier to review your DD payment based on your actual usage.”
weflip’s tips to help energy customers ensure they receive more accurate bills and avoid future overpayments:
- Provide your gas and electricity provider with regular meter readings. This will help you and your provider better understand your estimated usage and whether this is in line with your actual consumption.
- Open and read energy bills. So, you are aware of how much energy you’ve used, what you’ve paid, whether your bill has been estimated and see of your account is in surplus.
- Ask your supplier for a smart meter, these send meter readings automatically to providers – removing the necessity for estimated bills.
- If you still think you are paying too much for your energy, you can use weflip to search for a better deal. We will switch you to a cheaper tariff and then automatically move you in future when a cheaper tariff becomes available.
How weflip works
Customers register their details and provide information including current supplier and tariff, energy usage – which can all be found on an existing bill. weflip’s algorithm pinpoints the best deals and identifies the right moment to switch a customer’s energy supplier by comparing thousands of tariffs.
weflip checks daily to see if there is a cheaper tariff available to customers (including any exit fees to leave their current deal). Once a saving of at least £50 (including fees) is identified, it automatically moves them onto the new, cheaper deal. Typically, the process takes 21 days and customers can expect to be switched two or three times a year.
For more information on saving money on your energy bills visit: https://www.weflip.com/
For further information please contact:
Anders Nilsson, Martyn John and Louisa Marsden on firstname.lastname@example.org
Gordon, Jason or Liz at MAW Communications on 01603 505 845
Notes to editors:
*£1.17bn calculation based on: 51% of households in credit on their energy bills. According to the ONS Families and Households: 2017 there are 27.2 million households in the UK. 51% of 27.2 million is 13,872,000. 13,872,000 x £84.80 (average overpayment) = £1,176,345,600 (rounded to £1.17bn).
**On 5 October 2018, Bilendi conducted an online survey among 2,002 randomly selected British adults who are Maximiles UK panelists. The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.
weflip is a smart savings service that helps people save money by automatically switching them to better energy deals.
weflip is a completely free, automatic savings service that guarantees cheap energy forever. After customers sign up, weflip simply flips households onto cheap energy tariffs automatically, doing all the hard work on their behalf, so they never have to worry about overspending on energy ever again.
weflip is part of GoCompare.com Group plc, which operates GoCompare, one of the UK’s largest and most trusted comparison sites and has been saving customers money on a range of financial and non-financial products since 2006.
weflip’s energy service is powered by Energylinx, which is also a GoCompare Group plc company, and one of the UK’s most established and respected energy comparison services.
weflip takes customer privacy seriously and does not sell customer data.