Martin Lewis has issued a warning to energy customers across the UK as he returned to our TV screens for the latest series of the Money Show Live.
The financial guru spoke about the ongoing cost of living crisis which has seen the likes of shopping and energy bills soar.
During the first half of the show, Martin spoke about the energy crisis following the announcement from new Chancellor Jeremy Hunt that the UK Government’s £2,500 energy price guarantee will end next April.
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The guarantee, as reported by the Daily Record, replaced Ofgem’s price cap and prevented bills rising from £1,971 to a predicted £6,000 this winter with Martin telling viewers that early forecasts from industry analysts, Cornwall Insight, suggested that the nation is facing a 73 per cent hike in gas and electricity bills from April to an estimated £4,350.
Because of this, he issued a warning to people who are with British Gas and EDF over their Direct Debits payments. He explained that both energy firms only review Direct Debits twice a year, linked to when customers signs up. This means they could be facing a huge rise in their payments next year.
Martin warned: “Direct Debits are currently being assessed by some firms on the back of that 27% rise to the energy price guarantee [£2,500], all the major firms are doing it, but there are two I want to point out though.
“British Gas and EDF, big firms there. If you’re a customer of one of those firms, unlike the others, they don’t recalculate your Direct Debit when there’s a price move.
“They just do it at two points in the year - normally the sixth month and one year anniversary of when you joined - which means you may stay on your current Direct Debit for the next few months even though the rate you’re being charged is higher.
“That means when they do alter your Direct Debit, the increase is likely to be much bigger because you’ve got to catch up.”
However, the founder of MoneySavingExpert.com did offer a solution that could help level payments off and stop the sharp rise when the Direct Debit is reviewed.
He said: “In that case, you may want to go online and ask your supplier to increase your Direct Debit now so you’re not going to be hit by that bigger bill shock later.”
Martin also shared checks people can make if your monthly Direct Debit goes up after a pensioner named Yvonne contacted the show about a huge leap in her monthly payments.
Yvonne said: “I have just received my new monthly Direct Debit from my energy provider and it has gone from £49 per month to £123 for September and then £181 from October 28th. I am in credit of £200, is this correct, as this will be one week’s pension money.”
Martin explained that most people can expect their bills to double this winter, as energy prices have doubled since last year and that was expected to happen. However, he said there are three checks to make before contacting your energy supplier and asking them to review the amount you are expected to pay.
Martin Lewis shares three Direct Debit payment checks
Are you giving regular meter readings or do you have a working smart meter?
- If you don’t, you need to get in touch with your supplier as the estimate could be wrong.
Are you in bill credit or debt?
- If you’re in credit, your bill shouldn’t go up much.
Have you come off a cheap fix?
- If you have, your bill would have increased by far more than double over the last year.
If you pass all three of those tests, Martin explained that there are calculators online which can show you what your Direct Debit should be.
He said: “I suggest you put your details into that to give you an idea of what you really should be paying and then you get in touch with the energy firm and ask them why your Direct Debit is going up.”
Martin added that you should mention to them that you are in credit and how your bill has gone up but you’re on the price cap. He said if they can’t justify the rise, you can then ask them to review the Direct Debit amount.
If you missed this week’s Martin Lewis Money Show Live, you can catch up on the STV Player.
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