70% of Welsh bill payers agree credit should be returned automatically by energy suppliers

Over two-thirds of Welsh bill payers are calling for energy suppliers to automatically return any credit in their account after winter following the success of a mass protest.

Over 20,000 customers joined the Big Energy Credit Claim Back launched in May, which urged supporters to reclaim unused customer credit.

The campaign ended on Monday (July 1) when households need to start saving again for the coming winter.

The protest was launched after a Warm This Winter investigation revealed UK energy suppliers are sitting on over £3 billion worth of customer credit with nearly a third of UK households 32% in the black to their energy supplier all year.

Further analysis found that the combined bank interest energy suppliers have made through customer credit balances was at least £159 million in 2023.

Bill payers have claimed back an average of £330 from energy suppliers in the mass protest organised by the Warm This Winter coalition which is now calling on the next Government and Ofgem to introduce an automatic credit return of people’s cash after each winter.

Warm This Winter spokesperson Fiona Waters said: “People are fed up with energy suppliers keeping hold of their cash, making millions in interest on it and then customers often struggle to get their money back from reluctant suppliers.

“It’s common sense that after winter, if they have credit on their account it should automatically be returned to them and that’s why so many people joined the Big Energy Credit Claim Back.

“The campaign proves that by a simple measure, bill payers can slash on average over £300 from their annual energy bills which is much needed and there is no real reason why an automatic cash back isn’t implemented.”

Heating

Customers who pay their energy bills by direct debit are incentivised with better deals to spread payments over 12 months, building up a pot of credit from July onwards to cover the winter months when they will be using more energy on heating.

In May, if their account is in credit, then experts, including Martin Lewis have pinpointed this as the time to reset their balance and get back credit before they start saving again in July.

But under the current system, this is not automatic and instead, the onus is on consumers to claim back their credit which can be complex and in some cases, suppliers do not return the excess credit.

New research by Warm This Winter on how easy it is to claim back credit revealed nearly a third of Welsh bill payers (28%) found it difficult to get credit back.

Nearly a quarter (24%) felt their direct debit payments had been set too high and
of those who got their credit back 13% were paid after a fortnight or more, 6% are still waiting for their money to be returned at the time of polling and 14% were refused their money even though they were in credit.

Simon Francis coordinator of the End Fuel Poverty Coalition said: “Credit hoarding by
energy suppliers must become a thing of the past.

“Over a third of people in permanent credit to their energy firms live in households with low incomes and may have cut back on energy use or other essentials because the direct debits set by energy firms are far too high.

“Let’s hope that once general election fever is over the regulator wakes up and introduces a new licence condition on suppliers that credit balances are refunded after each winter on an opt-out basis.”

The Warm This Winter research conducted by Opinium this month revealed that a quarter of Welsh people (23%) who paid by direct debit found understanding how their direct debits were calculated was difficult.

Matthew McGregor, CEO of 38 Degrees said: “The fact that so many people have taken matters into their own hands by joining this campaign shows just how broken our energy system is – and how much people are still struggling with the cost of living.

“The next Prime Minister must take bold action to support struggling families – such as by establishing a proper social tariff for energy bills.”