Energy bills are a significant expense for the nation’s households, and to spread the cost, many of us pay by monthly direct debit.
The actual amount we pay each month is set by the provider based on how much gas and electricity it thinks we’ll use in a year, divided by 12.
As this is only an estimate, it could be too low or too high.
If it’s too low, the energy company will increase the amount to a more realistic level, or ask you to pay what you owe.
But if the direct debit is too high, you’ll build up a credit balance, having paid more than the actual energy used.
That’s money sitting in your energy account that could be earning interest in a savings account (instead of earning interest for your energy provider!), or which you could put towards your next holiday or any other expense.
So how do you find out whether you’re in credit? And how do you get that money back?
Am I in credit?
If you manage your energy account online, then it is really easy to establish whether your account is in credit. All you have to do is log on to your account and check your balance.
It should tell you whether your account balance is based on estimated meter readings, and should allow you to enter today’s readings so you can get an accurate balance (it’s worth doing this as a matter of routine anyway, if you don’t yet have a smart meter fitted at your property).
If you don’t manage your account online, then check your latest bill - it should detail whether you’re in credit or not. Alternatively, give your supplier a phone call.
How do I get my money back?
Should you be in credit, you can ask for your cash back at any time - suppliers are obliged to hand it back if you request it, unless they have “reasonable grounds” to turn it down.
It’s a straightforward task. You can generally do it online - just log on to your account, head to your account or direct debit section, and there is usually an option to request a refund.
Alternatively, you can simply call your supplier and ask for your money.
Many energy suppliers actually provide automatic refunds if your account is in credit, though the circumstances in which they return your cash varies significantly between them.
For example, while British Gas and npower automatically refund any credit balance over £5 at the end of your payment year, with Scottish Power you only get an automatic repayment if you are at least £75 in credit.
Should I really reclaim the money?
Just because you are in credit with your energy supplier, it doesn’t mean that reclaiming that cash is a good idea.
When you pay for your energy by direct debit, you pay a set figure each month, but your energy use isn’t quite so consistent - you’ll use far more energy during the winter months, when the heating and the lights are on more often, than during the milder months when you are not so radiator reliant and the days are longer.
The idea is that overpayments during those warmer months will be balanced in the colder months when you pay for less energy than you actually use.
As a result, you should think carefully before requesting your credit balance to be repaid. It may leave you needing to pay more later on, in order to address debt on your account when the temperature plunges and your energy use rockets.
That said, if you are significantly in credit – especially around this time of year, with the coldest weather and the highest levels of consumption behind us – then reclaiming at least some of that money is a sensible idea.
Changing your direct debit
Your direct debit is estimated based on your previous consumption levels, so it is entirely possible for it to be inaccurate.
If the amount you pay is completely out of sync with your actual use, then you can also speak to your provider about adjusting your monthly direct debit.
Some energy suppliers are particularly proactive on this front, adjusting their customers’ direct debits every couple of months to try to find the right level to match their energy use.
But it’s a good idea not to rely on your supplier to do it for you - keep an eye on what you are paying, and how it compares to how much energy you are actually using.
Don’t forget your old suppliers
Around three million people are believed to be owed money by their former energy suppliers. This may be a supplier that you had at a previous address, or one that you have switched from at your current property.
The My Energy Credit website was established to make it easier for people to get back the money from former suppliers. It details the contact details for each of the ‘big six’ suppliers as well as explaining their refund processes.
It doesn’t matter if you can’t remember your old account number, and it also doesn’t matter how long ago the account was closed - you are still entitled to the cash.
All of the suppliers say you can handle the process over the phone as well.
Get the best energy deal
All energy users should check to see if the tariff they are on is competitive – something you can do quickly and easily on our energy comparison channel.
If you haven’t switched provider for a number of years, or have never switched, it’s almost certain you could save money by switching to a fixed term, fixed rate dual fuel tariff.
We’ve found that savings of up to £568* a year are available.
With such deals, the amount you pay for each unit of gas or energy is fixed for the term, so you’re insulated from price increases for the duration of the tariff.
The flipside is that you won’t benefit if prices fall, although experts agree that energy prices are unlikely to come down any time soon.
You should also be aware of exit fees, which might be charged if you want to switch again during the period of the fix
* 10% of customers could save up to £568. MoneySuperMarket Data average usage figures, 2016