It’s the best time to take stock of your energy bills

With the days turning shorter, the winds growing colder and bills getting higher, the cost of gas and electricity may be weighing on your mind. But this time of year is the best time to take stock of your spending on energy. That’s because your account will probably be in credit if your energy supplier has done its sums right. You may even find you have a few hundred pounds in credit staring at you, temptingly.

So what should you do about this credit? Cash it in or use it to lower your bills? And what else can you discover about your energy use at this time of year? Here’s my guide.

How energy bills are spread over a year

Of all of our bills, energy is unique because of the way it’s calculated. You spend the cold bit of the year potentially owing money and the warmer bit of the year in credit. This is hard to get your head around, so here goes…

Let’s say that over a twelve-month period, you spend on average £100 a month on gas and electricity. When the heating is on over winter, your energy usage goes up. Which means you may be using the equivalent of £150 a month of energy. The supplier charges you £100, which builds a debt of £50 a month.

However, in the spring when the heating goes off, you may only be using £50 of energy - but you are still being billed £100 a month. After a few months, that extra £50 you are paying will have whittled away the debt on your account and should start building up a credit.

Do you cash in your energy credit?

If money is tight, you might be looking at that energy credit on your account and be thinking: should I cash it in?

Before you go there, it makes sense to understand a bit more about what’s going on with your bill. That credit you’ve built up should be used to reduce your monthly payment over the winter months. So if you ask for all the money back, your payments should go up.

So look at your energy consumption over the last 12 months. Most energy firms will allow you to see this on their websites (use the desktop/computer version rather than the app as there’s often more information available there). If you haven’t changed your lifestyle significantly, that should give you an idea of your energy use over winter.

If this isn’t clear, ask your energy supplier to spell it out for you. If you’ve moved recently then ask them for a rough approximation for a household of your size.

As a general rule, it makes sense to have enough credit on your account to cover two monthly payments.

How do I claim my cash back?

Energy credit is your money, so you are perfectly entitled to ask for it to be paid to you. However, some energy firms have been criticised heavily for making it hard to do this. You may have to phone them up, for example or you might not be able to request a refund online. Other firms may claim they can’t issue refunds if a meter reading was given recently.

It makes sense to wait until a meter reading has been processed, however, you can insist on a credit refund even if you end up paying higher monthly payments. If the firm refuses, make a complaint and tell them you will go to the (free) Energy Ombudsman if you aren’t satisfied.

One last thing. Check your bill to see if there is an ‘E’ (for estimated) after any of the readings or balances. That could mean your bill is wrong, especially if your smart meter is playing up.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. Read more from him at this link.​