Energy Companies Hold £3 Billion of Customers’ Money as Credit Balances Surge
Despite facing higher energy bills, over half of UK households have credit balances with their energy suppliers following the winter season. Research conducted by Uswitch.com unveils that the average household in credit has £210 left with their provider, totaling £3 billion across the nation.
This surplus is attributed to various factors. Some households may have been overpaying their energy bills during the previous winter, as they did not receive government support. Additionally, the mild winter led to reduced energy usage, resulting in higher credit balances.
Although consumers are generally holding more credit, some have accumulated significant balances. One in seven consumers (14%) have balances surpassing £300, while 5% have more than £500 with their energy provider. However, only a quarter (28%) of consumers plan to ask for a refund.
Two fifths (44%) of households with more credit than last year attribute their balance to excessive direct debit payments. Others (40%) credit their efforts to reduce energy consumption, while a third (33%) report using heating less frequently due to the mild winter.
More than half (56%) of households with credit plan to leave the money with their supplier to reduce monthly payments. A small proportion (11%) intend to request a full refund, while 16% will ask for a partial refund.
Meanwhile, the number of households in energy debt has increased by 167,000. On average, consumers in debt owe £194 to their providers, with British Gas customers having the highest level of debt at £247.
Will Owen, energy expert at Uswitch.com, advises consumers with excessive credit to consider reclaiming some of it, especially given the recent decline in energy prices. He also emphasizes the importance of accurate billing and regular meter readings to ensure households are not overpaying or underpaying for their energy usage.
The existence of both energy credit and debt highlights the diverse financial situations of UK households. While some have managed to accumulate savings, others continue to struggle with rising energy costs. It is crucial for energy suppliers and policymakers to provide support to those in need and ensure equitable access to affordable energy.
