With the UK in the grip of its worst energy crisis in a generation, every penny counts.
And yet, Ofgem figures have shown energy suppliers were sitting on more than £8.1 billion in customer credit in early 2023. It means some households could be owed more than £1,000 by their provider, with many more due £100s.
It comes as bills are expected to soar in 2024 thanks to a surge in wholesale costs. Cornwall Insight expects the Ofgem energy price cap will remain above its current level throughout 2024. It has left the energy market bereft of competitive deals – see our energy comparison guide to find out more.
So, if you’re owed money by your supplier, how can you get a refund? Here’s a quick guide.
Why does credit build up?
Credit builds up when you’ve overpaid on your energy bills. This could occur in a number of scenarios.
Perhaps you’ve moved house and had credit left on your energy account at the property you left. Maybe you’ve switched supplier and your old provider’s still holding on to your credit.
Or, you’ve been paying a set amount in direct debit for a while and it’s far outstripped your usage. Usually, suppliers aim to leave you with a net balance of £0 by spring each year, but this system can sometimes go askew – especially if you don’t have a smart meter and you don’t submit regular meter readings.
In all of these scenarios, the best thing to do is to get your current/former supplier on the phone. You may be able to claw £100s or even £1,000s back.
Am I due a refund?
Working out whether you’re entitled to a refund is a relatively straightforward process. All you need is your most recent bill from your gas and electricity supplier, or to log in to your online account or your supplier’s app.
It will have a section that outlines your balance. If it’s positive, your supplier will be holding credit – and if it’s negative, you will owe your supplier cash.
It’s only worth chasing up your supplier if you’re in credit by more than two months’ worth of direct debits. The actual figure will vary depending on the size of your home and your energy usage. The reason for this is you will often need a financial buffer during the winter months, when your energy use is likely to be higher.
If you’ve got credit that’s well above this level, it’s better to have it in your own pocket rather than locked away in your energy account. With interest rates on savings accounts still high, your money will be able to work harder in the outside world.
Under Ofgem rules, your direct debits must be set at a fair level. It means your supplier’s initial reaction to a refund request may be to recommend reducing your monthly payments instead. Suppliers must also refund credit on request – although they can refuse to do so if they set out clear reasons.
How can I get a refund?
Some suppliers may automatically refund you any credit you’ve built up. However, other suppliers will make you jump through several hoops before you can access your cash.
Either way, if you want to get a refund, call your current supplier and give them an up-to-date meter reading. It’s worth giving meter readings on a regular basis anyway (especially if you don’t have a smart meter), as it will help your supplier to bill you more accurately. They may try and convince you to leave money on your account, which is actually not a bad idea if you’re going into winter.
But remember, the choice is yours. Even if you end up following their advice and leaving some money on there, it can help to know you made the decision yourself. If you think a former supplier owes you money it’s the same story. But there’s obviously no point leaving money in an account you are no longer using.
If you aren’t happy with the supplier’s response, you can make a complaint. And if this doesn’t get resolved quickly, you can take it to the Energy Ombudsman.
When do you get compensation?
If you switch away from a supplier and it takes longer than 10 working days to receive your credit, you may be entitled to compensation. You could get a £30 payout if a supplier is late in refunding your credit balance after you switch. Under Ofgem rules, the supplier has:
- six weeks from a switch to send a final bill
- 10 working days from a final bill to refund a credit balance
- 10 working days from identifying a standards breach to automatically compensate you. They could owe a further £30 if they don’t meet the compensation timeline.
If you think you are due a credit refund or compensation, contact the supplier.
