Martin Lewis has offered fresh expertise to all energy customers during the new series of his Money Show Live this week. The consumer champion devoted the first part of his programme to the current energy crisis. It followed on from Chancellor Jeremy Hunt's slashing of the original two-year energy price promise to just six months.
The guarantee of a £2,500 limit, which replaced Ofgem's price cap, stopped bills from soaring by £1,971 to a predicted £6,000 this winter. But, worryingly, Martin told viewers that early forecasts from industry analysts at Cornwall Insight suggested that the UK would face a 73% hike in energy prices from April, to an estimated £4,350.
In light of the hike, Martin has issued another warning to British Gas and EDF customers in particular with regards to their Direct Debit payments. He said the two firms only reviewed payments bi-annually, linked to when customers joined, the Daily Record reported. It means they could be faced with a substantial rise in their payments next year. You can get more consumer news and other story updates straight to your inbox by subscribing to our newsletters here.
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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.”
Luckily, the MoneySavingExpert founder offered a viable solution, which could help level off payments and prevent a sharp rise upon Direct Debit renewal. 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 could make if their Direct Debit went up. It came 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 28. I am in credit of £200, is this correct, as this will be one week’s pension money.”
Martin explained that most people could expect their bills to double this winter, as energy prices had doubled since last year and that was expected to happen. However, he said there were 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 were calculators online which could show you what your Direct Debit should be.
He added: “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 also suggested that you should mention to them that you are in credit and how your bill has gone up, but that you’re on the price cap. He said if they couldn’t justify the rise, you could 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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