Consumer champion Martin Lewis has issued a stark and urgent warning to households across the UK, urging them to take immediate action on their energy direct debits to avoid being unfairly overcharged.
The founder of MoneySavingExpert.com took to social media to sound the alarm ahead of a significant shift in the energy market. His message is clear: failing to check your direct debit settings in the coming days could see you unnecessarily parting with hundreds of pounds.
The July 1st Price Cap Change
The urgency stems from the latest Ofgem energy price cap announcement. From July 1st, the cap, which limits the amount suppliers can charge per unit of energy, will fall by around 7%. For a typical household, this means an annual bill of £1,568, a drop of £122 from the current quarterly figure.
While this sounds like positive news, Martin Lewis highlights a hidden danger. Many energy firms automatically increase direct debits to build up a customer's credit, especially before the higher-usage winter months. However, with the unit price falling, this common practice could now lead to massive overpayment.
The £310 Warning
Lewis specifically warned that some providers might try to “use this as an opportunity to try and get you to build up more credit in your account.” He estimates that an average household could see its direct debit rise by £60 to £70 a month if they do not intervene.
This could result in an annual overpayment of more than £310. This is your money, effectively sitting as an interest-free loan in your supplier’s account instead of your own.
What You Need to Do Now
Lewis’s advice is straightforward but crucial. He urges every customer to:
- Submit an up-to-date meter reading on or before June 30th. This ensures your billing is accurate and based on the old higher rates, using up any existing credit.
- Contact your supplier to reassess your direct debit. Once the new, lower rates are active, your monthly payments should be recalculated downwards to reflect the cheaper energy.
Do not simply accept an increased direct debit demand. You have the right to a fair payment plan based on your actual estimated usage.
Why This Matters
This proactive step is essential for maintaining control of your finances. With many families still struggling with the cost of living, an extra £300+ tied up unnecessarily could make a significant difference to household budgets.
As Martin Lewis succinctly put it, this is about ensuring “the amount you pay each month is correct for what you will use.” Taking five minutes to act now could put vital cash back in your pocket.
