Martin Lewis has urged households to check their energy direct debits, warning that many may be paying far more than necessary. The Money Saving Expert founder said on his BBC podcast that some direct debit payers have seen their charges double since the Government's Energy Price Guarantee took effect in October, which capped average annual bills at £2,500—a 27% increase.
Lewis advised that a direct debit rise of 30-40% is reasonable, but increases of 50-80% warrant investigation. He noted that being in credit heading into winter is normal, as the system smooths out usage. However, consumers should ensure they have a working smart meter or submit manual readings to avoid inaccurate billing.
He recommended using online calculators, such as comparethemarket.com's Bills Calculator, to estimate typical costs for an area. If the estimate is significantly lower than the current direct debit, customers should challenge their supplier. Lewis said: “You want to politely call them up, tell them you’ve done the calculation, and ask them to justify why your direct debit is going up so much.”
He shared the example of a woman named Janet, who got her monthly direct debit reduced by £208 after challenging her supplier. If a supplier refuses to lower the amount, Lewis suggested switching to a variable direct debit, which charges based on actual usage and avoids the 8-9% premium of paying on receipt of bills.
From January, Ofgem's price cap changes will add small increases—0.8% for prepayment meters and 1.4% for receipt-of-bill customers. However, the Energy Price Guarantee will rise in April, pushing average annual bills to £3,000.
