Why are my energy bills going up?

Other than the fact the price cap has risen and we tend to use more energy during the colder winter months, there are two other main reasons why your energy bills might be going up rather than down at the moment.

The first reason is that the government’s universal £400 discount to help with energy bills has now concluded. This was put in place to help households with high energy bills over the winter, and went to every household in the UK automatically.

The £400 was paid out in six monthly instalments between October of last year and March of this year, with the first two instalments being £66 and the remaining four being £67.

If you have a standard energy meter, these instalments were applied either as reductions in your monthly direct debits to your supplier, or as partial refunds to your bank account after the direct debits were paid.

Customers with “smart” prepayment devices should have had this money added to their accounts automatically, while those on pay-as-you-go prepayment meters should have received redeemable vouchers via post, email, or text.

Now that the scheme has ended, many customers who enjoyed temporary relief from bills thanks to the discount are likely to be feeling the difference.

The second reason that your bills might be higher is that your supplier may have recently reviewed its direct debit levels. Some suppliers review their direct debits constantly, while some do it in increments of three or six months.

For example, British Gas says it reviews direct debit levels once or twice a year, EDF reviews every six months, and E.on Next reviews every three months. Octopus Energy says it reviews direct debits constantly.

So, if your supplier reviews direct debits on a quarterly or six-month basis, and you used more energy during the winter (as many of us do), this could be the reason why your latest bill was higher than it was before.

If you think you have been charged too much for your energy usage, you can contest your direct debit with your provider. You’ll need to get in touch with them and ask them to explain how they calculated the new amount. If you’re not happy, you can ask them to lower your payments to better reflect your usage, or so they are more affordable.

Alternatively, if you have been using less energy, you might have had your direct debit reduced instead – although you’ll have taken a hit from the end of the government discount scheme either way.

If your direct debit has been reduced, you may be in credit for your previous months of energy usage. Your supplier might pay this back to you with a refund at the end of the year, or by reducing your next payments. If they have chosen to do the latter but you would like your money back instead, you can contact them and ask for the refund – although bear in mind it can be helpful to have the credit on your account for when the weather gets colder. If they refuse to refund you, they have to explain why.

If your supplier has gone bust, you should still be able to claim credit with the help of whichever new supplier you’ve been switched to.

You can read about some easy ways to save energy and cut down your bills next time your provider reviews your direct debit in our article Energy saving tips: how to reduce your bills.