A man has shared how a tip from Martin Lewis resulted in him and his partner securing a £4,000 credit refund from their energy provider — and it only required a single phone call. The MoneySavingExpert.com founder addressed energy bills on ITV's Martin Lewis Money Show Live in the run-up to the Ofgem price cap announcement for July next week.
Mr Lewis suggested that now is the perfect opportunity to check whether excessive credit has accumulated in your account. This can happen for various reasons, but typically because unused credit builds up during summer when your energy consumption is lower, to assist with payments in winter when it is higher. While it is crucial to maintain a buffer to see you through the colder months, you may have considerably more credit than necessary, reports the Express.
Optimal credit level
The personal finance expert said the optimal situation is to hold no more than a month-and-a-half's worth of direct debits in credit in your account come May. Mr Lewis indicates if you have an amount of credit exceeding this, you ought to consider requesting some of it back, which can be arranged by reaching out to your supplier.
He said: "The basic pattern is, over those winter months, you use your credit or you build up debt, depending where you are. That bottoms out just around May... and then you start to build up credit until it peaks in November. If you've got a lot of credit right now, this is the point where you shouldn't have a lot of credit — which is why this is the perfect time to be checking."
He added that his general guideline is that if you "have more than a month and a half worth of direct debits in credit right now, I would want it back". "So if you pay £200 a month, you got £300 in credit, that's fine — but £500, I'd want £200 back," Mr Lewis added.
Real-life success story
Couple Jill and Brian recounted their experience of uncovering a substantial amount of excess credit that had built up. They chose to investigate after viewing an episode of the Martin Lewis Money Show last November. It emerged they had been overpaying for years, and thousands of pounds were simply sitting there unused. Jill said the couple were paying approximately £216 monthly, "which to me seemed extraordinary", she added.
Brian, who handles the energy bills, said: "When I phoned the energy provider, they actually went back and checked and we'd been overpaying for three years. There was £4,500 in credit. I left £500 in the account so we ended up with a £4,000 refund."
Energy price cap set to rise
The money-saving advice arrives as energy bills are predicted to rise by more than £200 annually for the average household from July, with an announcement from Ofgem due next week. Cornwall Insight anticipates the regulator's energy price cap will climb to £1,850 this summer, representing a 13 per cent increase from the present £1,641 yearly bill. Ofgem will confirm the July price cap on 27 May, which will stay in effect until October.
