The energy price cap, which sets a limit on the rates you pay for gas and electricity, has just shot up, meaning a rise in energy bills for 15million households – and many will see their direct debit payments jump in response
Martin Lewis has explained whether your energy supplier can hike your direct debit bill if you’re massively in credit.
The MoneySavingExpert founder says he has been inundated with this question as households across the UK are hit with rising energy bills.
The energy price cap – which sets a limit on the rates you pay for gas and electricity – has just shot up, meaning a rise in energy bills for 15million households.
Ofgem has raised the price cap for standard and default tariffs from £1,138 for a typical user to £1,277 – an increase of £139.
Meanwhile, the price cap for prepayment customers rose by £153 from £1,156 to £1309.
The price of gas, which is at record highs, is being blamed as nine energy firms went bust last month, affecting around 1.7million customers.
Addressing his 1.2million followers on Twitter, Martin shared his answer to the question: “I’m comfortably in credit, but my energy firm’s hugely hiked my Direct Debit, is this fair? What do I do?”
In his answer, the money-saving guru said it depends on if your direct debit increase is “out of proportion” to cost rises.
Martin explained: “A direct debit is designed to smooth out your energy costs across a year.
“Going into winter, it’s normal to be a month or so in-credit. So as the price cap has risen 12%, if you’re on it, expect a similar direct debit hike.
“If you’re coming off a cheap fix and paying 30% to 40% more, expect that too. Yet if you’re in credit and your direct debit is rising way above the rate rise, there’s an issue.”
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Martin suggested first doing a meter reading to make sure you’re being billed correctly in the first place.
Once you’ve done that, if you feel you’re still being overcharged, call your energy provider and ask them to explain the increased payments.
“If it can’t, ask for it to be lowered,” said Martin.
“My concern is some firms are hiking direct debits right now to help their cashflow, even when it isn’t justified.”
Speaking last month, Martin also told households to screenshot their online energy bill now – even if they haven’t seen their energy supplier go bust.
This is because if a supplier does go under, you’ve got a document of your most latest energy usage.
The MoneySavingExpert founder has also explained whether you need to cancel your direct debit or not if your energy firm goes under.
And speaking on his ITV show last month, Martin said households on the energy price cap are now on the cheapest deals.