Martin Lewis issues 'one to two month' warning to anyone paying energy bills
Martin Lewis explained exactly how much credit you need in your energy account right now.
The new series of the Martin Lewis Money Show began again last night on ITV. As we head into the winter months, the Money Saving Expert (MSE) founder opened the show sharing advice and guidance on all things energy.
Martin noted on the show that many of us will have built up a considerable amount of cash in our energy account adding that you could be owed some cash back. Martin explained to viewers that If you pay your energy bills by direct debit, your supplier will take your annual costs, based on your average use and divide it by 12 to work out your monthly payments.
This smooths out your bills so you are facing sky-high bills in the winter when your energy use will likely be higher. He added: "It's a good budgeting concept, one I'd probably call for them to introduce if it didn't exist."
Martin noted that having a little bit of credit in your account is a good thing, but we didn't need to be in credit at all times of the year. He said: "You need to understand we're meant to spend part of the year in energy credit, part in debit and the key is to know where you should be at, when.
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"Early November is the time you should have maximum credit. It's after summer's peak, in late August, by the time you're actually in credit, with that maxing out in November. So you would want that buffer zone of a month or two's worth of credit then."
This means energy bill payers need to have around two worth of credit in there at this time of year - so around 60 days' worth. This is because your credit will reduce over the winter months and should be in energy credit debt at this time.
If you have more then two months or 60 days you should ask for some energy credit back, if you have less, then you should keep the credit in your energy account. You may also want to increase your monthly payments to cover yourself.
Before you ask for some money back, you need to make sure your estimated bills are on track so you should take a meter reading for your supplier. If you have a smart meter, readings should be sent automatically. Brits should also bear in mind at what point you are on your billing cycle - if you pay a monthly direct debit but are only billed every six months, that large "credit" on your account may be completely wiped out when you get your next bill.
Martin shared that energy companies are sitting on a cash pot of £8.1billion of customers' money in credit adding: "Some of it is yours. And you are entitled to that money back.
"Make sure you have done your meter reading, make sure you have a couple of months worth of credit, and if you're in too much credit, then you will want some of that money back. Sometimes you can do it online, some companies will do it automatically, and for others you need to call up and see what they can do."
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