Hard-up families heaved a collective sigh of relief when a 20% increase in the price of energy due to start this month was postponed in the Spring Budget.
However, confusion has reigned, as many found that their direct debit payments have increased, despite the Government keeping the Energy Price Guarantee (EPG) at £2,500 a year for a typical household until July. Martin Lewis's website Money Saving Expert has been swamped with people asking why their bills have gone up, despite the price of energy staying the same.
The reason is two-fold:
- The Government's £66 or £67 monthly support payments have stopped
- Some suppliers are also reviewing direct debit levels at the same time.
Read more: Prepay meter customers hit with shock energy bills for hundreds of pounds
The £400 energy bill support scheme (EBSS), which was paid monthly to nearly all households this winter, ended in March, so we're now feeling the direct effect of that on bills. But many suppliers are also reviewing direct debits levels to account for the shortfall, so you may see payments increase by more than £67 a month if you've used more energy than expected – or come down if you've used less energy.
How you were paid the Government's £66 or £67 monthly support from October 2022 to March 2023 determines how your payments will change going forward. If your supplier reduced your direct debit to accommodate the money from the EBSS, it may well want to increase your payment to cover the shortfall.
However, if your supplier paid your £66/67 directly into your bank account, you will probably continue to pay the same as you have been, as your payment was not adjusted to accommodate the EBSS money.
Here's what each firm told Money Saving Expert about its plans to change direct debits this month:
How the £66/ £67 EBSS a month was paid: Directly into bank account
Will my direct debit payment change? No – unless your payment is scheduled for its six-monthly review
How the £66/ £67 EBSS a month was paid: Direct debits automatically reduced
Will my direct debit payment change? Yes – factoring in end of Government payment and any usage changes
How the £66/ £67 EBSS a month was paid: Directly into bank account
Will my direct debit payment change? No – unless your payment is scheduled for its six-monthly review
How the £66/ £67 EBSS a month was paid: Direct debits automatically reduced
Will my direct debit payment change? Yes – factoring in end of Government payment and any usage changes
How the £66/ £67 EBSS a month was paid: Directly into bank account
Will my direct debit payment change? No – unless your payment is scheduled for its quarterly review
How the £66/ £67 EBSS a month was paid: Directly into bank account
Will my direct debit payment change? No – unless your payment is scheduled for its quarterly review
How the £66/ £67 EBSS a month was paid: Direct debits automatically reduced
Will my direct debit payment change? Yes – factoring in end of Government payment and any usage changes
How the £66/ £67 EBSS a month was paid: Direct debits automatically reduced
Will my direct debit payment change? Yes – factoring in end of Government payment and any usage changes
How the £66/ £67 EBSS a month was paid: Directly into bank account
Will my direct debit payment change? No – unless your payment is scheduled for its six-monthly review
However, be aware that these are the suppliers' general policies, so your direct debit could change differently, depending on whether you're in credit or debt, or if you've manually changed your payment amounts over the winter
If you don't pay by direct debit, the end of the £400 support will still affect you. The scheme worked differently depending on how you paid for your energy:
-
If you've a traditional prepayment meter: You will have been sent the £66 or £67 as top-up vouchers each month between October and March. You will not receive these any more and the end of the support means you'll need to top up more once your current credit runs out.
If you've a smart prepayment meter: The payments were added to your electricity account and, with the support now ended, you'll need to top up more once your current credit runs out.
- If you pay on receipt of a bill: The money was added to your energy account each month as credit. It's likely your next bill will be higher, depending on how frequently you're billed and how much energy you've used.
Now read:
- Why cancelling your direct debit to save money when it's warmer may not be a good idea
- More families can apply for an extra £200 to help with energy costs
- DWP benefits could be slashed as energy bill repayments freeze comes to an end
- Confusion as £400 energy bills support for households comes to an end
- Month-by-month guide to when you can expect all of this year's cost of living payments
