Over two thirds of bill payers (68%) are calling for energy suppliers to automatically return any credit in their account after winter following the success of a mass protest which saw 20,000 demand their cash back.
Over 20,000 customers joined the Big Energy Credit Claim Back launched in May, which urged supporters to reclaim unused customer credit. The campaign is set to end on July 1 when households need to start saving again for 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 [1], 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 [2].
Bill payers have claimed back an average of £330 [3] 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.
Hailed as a huge success for people power, 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.”
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 bill payers found it difficult to get credit back.
Over a quarter (26%) felt their direct debit payments had been set too high, with OVO first for high direct debits (31%), followed by British Gas and Eon Next (29%) and EDF taking third place at 28%.
Of those who got their credit back, just over half (56%) were paid quickly, for 17% it was paid after a fortnight or more, with 12% still waiting for their money to be returned at the time of polling and 12% were refused their money even though they were in credit.
And over a quarter (28%) never even attempted to claim back their credit.
Simon Francis coordinator of the End Fuel Poverty Coalition commented:
“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 which surveyed over 2,000 people across the UK also revealed a third of people (33%) who paid by direct debit found understanding how their direct debits were calculated was difficult and a similar number (32%) of UK adults felt it was also hard to understand how much energy they use.
Groups that also backed the Big Energy Credit Claim Back include 38 Degrees, National Pensioners Convention and Fuel Poverty Action, have also called for Ofgem and the next government to close this loophole.
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.
“We are currently in the midst of a cost of living election, and the next Prime Minister must take bold action to support struggling families - such as by establishing a proper social tariff for energy bills."
Jan Shortt, General Secretary of the National Pensioners’ Convention said:
“It is important that energy suppliers play fair with their customers. Holding onto excess credit and collecting interest is not acceptable when everyone is still finding it hard financially.
“Energy suppliers making it difficult for customers to be repaid their credit must be taken to task by the Regulator. Clearly, automatic repayment is the answer as the onus is not on older people to search for ways to get their credit back.”
Jonathan Bean from Fuel Poverty Action added:
"It's disgraceful that Ofgem has allowed energy firms to hoard our money during the cost of living crisis. Our money should be refunded automatically, with interest. Energy firms are deliberately overcharging and making it hard to get the refunds we are due. This exploitation must stop."
NOTES
[1] USwitch data as of spring 2024. Ofgem also reports on data, but with a lag. Ofgem data highlights the credit trends over time which show that credit balances range from £2.3bn to £5.1bn during a year. Latest data available is from 2023: https://www.ofgem.gov.uk/retail-market-indicators
Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.
[2] Analysis of Ofgem customer credit data and based on a standard NatWest business savings account offering 4.25% interest.
| Quarter | Customer Credit Balance (Ofgem) | Add 4.25% interest (based on NatWest Business Saver account) | Interest earned on balance (if annual) | Adjusted for quarterly figure (i.e. previous column divided by 4) |
|---|---|---|---|---|
| 1 | £ 2,300,000,000 | £ 2,397,750,000 | £ 97,750,000 | £ 24,437,500 |
| 2 | £ 3,298,000,000 | £ 3,438,165,000 | £ 140,165,000 | £ 35,041,250 |
| 3 | £ 5,078,000,000 | £ 5,293,815,000 | £ 215,815,000 | £ 53,953,750 |
| 4 | £ 4,291,000,000 | £ 4,473,367,500 | £ 182,367,500 | £ 45,591,875 |
| Total estimated interest earned on consumer credit balances for 2023 | £ 159,024,375 | |||
Opinium research conducted a nationally and politically representative online survey of 2,185 UK adults between 29th and 31st May 2024.
[3] Based on respondents to the Warm This Winter follow up survey of BIg Energy Credit Claim Back supporters, week commencing June 10
