Martin Lewis has urged millions of households to keep an eye on their energy bills after a huge change to the Government help scheme was confirmed.
Appearing on the ITV Martin Lewis Money Show Live, the expert told British Gas and EDF customers who pay their energy bills via direct debit to be aware of possible increases.
It comes as Chancellor Jeremy Hunt announced the Government’s £2,500 Energy Price Guarantee - which was supposed to run until 2024 - will be watered down from next April.
The help will become targeted instead of universal - but it isn't clear yet how this will work.
Early forecasts from industry analysts, Cornwall Insight, suggested that the nation is now facing a 73% hike in gas and electricity bills from April to an estimated £4,350, Martin told viewers.
Martin explained that both British Gas and EDF only review their direct debits twice a year, linked to when customers sign up.
It means they could be facing a huge rise in their energy bills 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, Martin did offer advice on how customers facing rises can soften the blow on their bills.
He said: “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.”
He also gave viewers three key direct debit checks to make before contacting your energy supplier and asking them to review the amount you’re expected to pay:
- Are you giving regular meter readings or do you have a working smart meter? If not, you should contact 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? Coming off a cheap fix means your bill would have increased by far more than double over the last year.
Martin said online calculators 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.”
He added that you should tell them you’re in credit and how your bill has gone up but you’re on the price cap.
If they can’t justify the rise, you can then ask them to review the direct debit amount.
