Customers find direct debits have doubled after energy price cap increase

CONSUMERS who are with British Gas, Octopus Energy and Shell Energy said their direct debits have doubled since the price rise, despite the price cap being half that, according to comparison website Money Saving Expert (MSE).

The website, founded by Martin Lewis, said at least 30 per cent of customers with those companies, who were in credit and on a price-capped tariff, reported their direct debits increasing.

Across all companies, 25% of customers in this situation said their direct debits had doubled or more.

Energy prices have rocketed in the last year, and last month the energy price cap was increased by 54% for the average household.

The results were gathered from a survey carried out by MSE between April 26 and May 3, with 41,000 responses.

The survey also found that those coming off fixed deals saw their direct debits rise the most. MSE said this is to be expected as they were likely on the cheapest tariffs and are now moving to the price cap.

Mr Lewis said: “Fixed monthly direct debit is how up to 80% pay for energy bills. The theory is a good one: your annual cost is divided by 12 so you pay the same amount each month, smoothing out high-use winter and lower-use summer costs.

“Yet I’ve heard from people shocked to be told their direct debits are increasing two- or threefold.

“Scarily, for some people this is reasonable.

“Those coming off cheap fixes, moving to expensive fixes, or who are in energy debt would expect to see their direct debit rise by more than the already hideous 54% increase in the energy price cap.

“While a higher direct debit does not mean you pay more in the end, any overpayments are ultimately due to be repaid, it does mean far too much cash flowing from accounts now, which is often a nightmare amid the cost-of-living crisis.

“So if you’re in credit, have been on a standard variable [pricecapped] tariff for six months or more, and your direct debit has gone up by far too much: submit an up-todate meter reading first, then speak to your supplier and politely ask it to justify the rise. If it can’t, request that it is lowered. If it refuses, make a formal complaint and take it to the Energy Ombudsman.”

In response, Octopus Energy told MSE its own analysis of customer account data showed only 0.84% of those in credit who had been on its standard tariff for over three months have seen their monthly payments double, with a median increase of 59%

Meanwhile British Gas told the website the higher-than-average increase could be down to the fact it offered an option for customers to freeze their direct debits at their existing levels last winter.