Energy credit: how to get your money back as Uswitch finds companies are sitting on almost £7billion

New research by comparison service Uswitch has shown that energy companies are holding onto almost £7 billion in credit from more than 16 million households as the cost of living crisis continues to tighten purse strings.

Credit balances in the UK are an astonishing £5.3 billion higher in 2023 compared to 12 months ago. The number of households in credit with their gas and electric suppliers has also risen, with five million more customers in credit with their suppliers.

The increase in credit reserves for customers comes after a warmer-than-expected winter period alongside conscious efforts by households to reduce energy use as direct debits continue to . In addition to this, UK households were also given grants via energy support schemes from the government to help with bills.

The number of households in debt with their energy suppliers across the UK has decreased. However the average amount of debt owed across the UK has risen from £188 to £234.

Richard Neudegg, director of regulation at Uswitch.com, said:“This high level of any credit suggests that energy-saving awareness campaigns and cost-of-living support have played a part in protecting consumers from what could have been an even more difficult winter.

“It could also raise the question of whether direct debits set by suppliers in reaction to the energy price hikes have been much higher than they needed to be. Normally we’d expect to see people exit winter with little or no credit balances, but a substantial number of households have weathered the storm, leaving suppliers sitting on nearly £7 billion."

How do you get a refund on your energy bill credit balance?

The Uswitch research also revealed that more than half of UK households don't know how to reclaim their credit balance. The comparison company is urging consumers to check their balance and reclaim any excess amounts as a result.

But just how do you do it? Is it as simple as simply requesting the balance from your energy provider?

Well, in fact, there are several different ways the balance may be refunded. For some, the amount in credit at the end of the year will be automatically refunded, with 64% of customers saying that they have received an automatic refund in the past year.

For others, the energy provider may hold onto the amount and issue the refund in the form of reduced monthly direct debit payments.

However, if you are looking for advice on how to request a direct refund of your credit amount, you are not alone. 54% of households said that they don't know how to request a refund for the amount.

It's quite simple - you can contact your energy supplier at any time of the year to request a refund on the credit in your account. You can specify an exact amount you want refunded or ask for the full credit amount.

In order to process the credit refund, you will also need to provide an up-to-date meter reading.

However, before requesting a credit refund, you should consider whether there is likely to be an increase in use of your gas and electric supply, as any excess use will be covered by the credit in your account. You should also consider if you will be able to continue with paying your bills as normal going forward without the credit buffer on your account.

There will be instances when an energy supplier may refuse your refund request This includes if a small amount of credit remains in your account in warmer months, in order to ensure that there will be enough in reserves heading into the winter months.

Mr Neudegg added: “If you are in credit, consider asking your supplier to refund some or all of your money, particularly if it will help ease other financial pressures. You should also ask your supplier to check that your direct debit is set at the right level for the amount of energy you use.

“Although the number of households in debt has fallen, it is important that those who do owe money to their suppliers continue to be given the support they need. 

“Wholesale energy prices have fallen since December and the prospect of lower bills is on the horizon, but costs are still historically high. Those struggling during the cost-of-living crisis continue to need help from the Government and suppliers.

“It is important that people without a smart meter continue to keep their supplier up to date with regular meter readings to ensure bills are as accurate as possible. Your supplier may also request new readings if you ask them for your credit to be refunded.”