As the nation swelters and temperatures reach record highs, heating our homes might be the last thing on our minds.
But fears are growing that Britain is heading for another winter of discontent, with energy bills set to exceed £3,200 a year — around a third of the typical state pension.
At the same time firms have been accused of overcharging customers after miscalculating their monthly direct debit payments. It means thousands of households may be entitled to refunds.
Fears are growing Britain is headed for another winter of discontent, with energy bills set to exceed £3,200 a year – around a third of the typical state pension
Analysts predict that the energy price cap could rise by a further 65 per cent this October — a figure consumer champion Martin Lewis branded ‘sickening’.
Mr Lewis went even further yesterday to warn ‘lives could be lost’ if more isn’t done to soften the blow of soaring bills this winter.
Meanwhile, major providers have raised eyebrows after reporting huge profits.
For the first quarter of the year Shell made £7.3 billion, while E.ON said it expects to rake in £6.5 bilion for 2022.
‘It is a national disgrace,’ says Scott Byrom from The Energy Shop.
‘Households are really going to struggle this winter while suppliers are profiteering. As for Christmas, I’m telling elderly relatives that they can forget buying me a present. Their money needs to be saved for bills.’
But how do you know if bill increases are fair or if you should challenge them?
Analysis by watchdog Ofgem found that more than seven million households on a standard variable tariff (SVT) saw their direct debit payments jump by an average of 62 per cent between February and April 2022.
Its review found that five firms had ‘moderate or severe weaknesses’ in the way they calculated direct debit payments.
These were Ecotricity, Good Energy, Green Energy UK, TruEnergy and Utilita Energy. A further seven — including Bulb, E.ON, Octopus, Shell and Ovo — were found to have ‘minor weaknesses’.
Ofgem said it found no ‘evidence of unjustifiably high direct debits’. However, it did note that the five worst suppliers’ processes were ‘not as robust as they could be’ leading to ‘inconsistent, incorrect or poor treatment for customers’.
These firms have been told to submit an action plan by July 27 to set out how they will rectify any inaccurate bills.
My bills jumped 238%
Refund: Lucy Hilton complained to EON after they hiked her monthly bill by 238%
Lucy Hilton was hit with a £550 demand from her provider E.ON after her bill for her one- bedroom flat in Manchester was hiked 238 per cent to £200 per month.
But when she raised a complaint, she discovered she was actually owed £150.
Lucy, 33, then managed to get her monthly bill down to £120, but still feels she is overpaying.
‘After a lengthy chat with a customer service representative they found E.ON had been overestimating my direct debits and actually owed me money,’ she says.
‘I ended up £150 in credit rather than £550 in debt, which had caused a lot of panic and anxiety.’
And all providers must now review any cases where direct debits increased by more than 100 per cent between February and April this year.
According to Ofgem, around 500,000 SVT customers are potentially entitled to a rebate or a ‘goodwill payment’.
Good Energy says it has already completed an internal review and adjusted credit balances that needed to be changed. Meanwhile, Octopus and British Gas say they constantly review direct debit payments and will update customers accordingly.
A spokesman for Utilita also confirms it is reviewing any cases where bills rose by more than 100 per cent — and will feed back findings to Ofgem.
If you think you have been wrongly billed, experts recommend first speaking to your supplier. Anyone who is unhappy with the outcome can then take their complaint to the Energy Ombudsman.
Between January and March this year, the Ombudsman received 19,352 complaints, up 26 per cent on the last three months of last year.
Billing disputes accounted for more than a fifth of all cases. Emily Seymour, sustainability editor at consumer body Which?, says: ‘To ensure you are not being overcharged, send your energy supplier regular meter readings.
‘You should have a buffer of credit on your account that builds up over summer and depletes over winter, but it shouldn’t be an excessively large amount — which could indicate your direct debits are set too high.’
Citizens Advice recommends keeping enough money in your account to cover one month’s supply.
Some suppliers refund credit balances at the end of each year. But you can request a refund yourself. Ofgem says firms must pay these ‘promptly’ unless they have reasonable grounds not to.
Hikes: Analysis by Ofgem found over seven million households on a standard variable tariff saw their direct debit payments jump by an average of 62% between February and April 2022
An industry row is brewing over how to best protect credit balances. It recently emerged that many now-defunct firms were misusing customer cash to fund their own business operations. Around £400 million of credit evaporated with the collapse of 28 firms.
The supplier of last resort appointed to take over customers’ accounts should refund what is owed. But many households are still waiting.
The chaos has prompted a crackdown by Ofgem, with its chief executive saying firms must not spend customer cash as though it were an ‘interest-free company credit card’.
Ofgem is now consulting on a plan to ringfence credit balances — a plan backed by most of the nation’s biggest providers including E.ON and British Gas. However, Octopus Energy is conspicuously failing to back the proposals as it claims the initiative would drive up customer bills.
The firm is bidding to take over Bulb, which went into administration in November.
It might be tempting to lock into a fixed tariff now to get ahead of looming price rises. But these deals are few and far between.
Joe Malinowski, of The Energy Shop, says: ‘If you can find a deal that would cost the average household under £3,000 a year it might be wise to lock into it but nobody is offering those. Any deal more expensive than that is pointless as you will end up paying a winter premium in August.’
Ms Seymour adds that households should be wary of hefty exit fees attached to fixed deals.
Time is also running out to claim the Government’s council tax rebate — worth £150. The deadline for applications is July 31.
Local authorities are concerned not enough taxpayers are claiming the cash.
Guildford Borough Council says one in three eligible households in its area had failed to submit a claim by the end of June.
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