If your direct debits are increasing, Martin Lewis outlines what to do.
Martin Lewis explains what to do if your direct debits are rising as a result of the energy crisis.
Due to skyrocketing worldwide wholesale energy prices, some UK energy suppliers have gone bankrupt.
As a result of the uncertainty in the sector, experts have warned that energy bills in the UK might jump by 30% next year.
After a £100,000 court case, anyone with a Ring doorbell camera could face sanctions.
According to research firm Cornwall Insight, rising gas costs and the probable collapse of more suppliers could boost the summer energy price cap to around £1,660.
The projection is around 30% more than the previous high-water mark of £1,277 set for winter 2021-22, which began in early October.
Once every six months, Ofgem evaluates the price cap and adjusts it based on the cost of energy for suppliers, policy expenses, and operational costs, among other factors.
Martin, on the other hand, noted that since the spotlight on the energy sector, he has been asked the same question frequently.
“I’m well in credit, yet my energy company has massively increased my direct debit, is this fair?” is a question that is frequently asked.
Martin responded by saying: “No, and it’s concerning if it’s out of proportion to the cost increase. A direct debit is used to spread out your energy expenditures over the course of a year.
“It’s common to be a month or two in credit when winter approaches. As the price cap has risen by 12%, expect a similar increase in Direct Debit if you’re on it. Expect it if you’re coming from a low-cost fix and spending 30-40% more.
“However, if you’re in credit and your Direct Debits are rising faster than the rate, there’s a problem.
“To begin, take a meter reading so that any Direct Debit estimate is based on current usage. After that is completed, phone and respectfully request that the firm justify the increase.
“Under the terms of your energy firm’s license, you have the right to a ‘fair direct debit.’ If it can’t, request that it be reduced. My fear is that some companies are currently raising DDs to aid with cash flow, even if it isn’t justified.”