Martin Lewis says May ‘perfect time’ to check if you’re owed £100s | Personal Finance | Finance
Brits have been urged to check now to see if they’re owed hundreds of pounds. According to finance expert Martin Lewis, this is the “perfect time” to claim your cash back.
In a video uploaded to his website Money Saving Expert (MSE), Martin claimed that energy firms are “sitting on” more than £3bn of customers’ money. This is due to people technically overpaying in their monthly direct debits, resulting in credit building up.
He explained: “If you pay your energy bills by monthly direct debit, this is the perfect time to check whether you are in too much credit. Energy firms are sitting on over £3 billion of our cash and you can get it back.”
Martin told viewers that now is the best time to look into this. He continued: “So why right now?
“Well, at the beginning of May, we are at the bottom of the curve in the energy direct debit cycle. That means this is the point of the year when you should have the minimum amount of credit.
“So go and have a look what credit you’re in.” Before you do anything you will need your latest meter reading.
“Make sure you’ve done an up-to-date meter reading, or you’ve got a smart meter doing that for you and that’s being factored in.
“Then, assuming your direct debit is about right, what I would suggest if you have any more than a month and a half’s worth of direct debits, that’s too much. So suppose your direct is £200 a month.
“If you’ve got £600 – a month and a half worth is 300 quid, so I’ll be getting in touch with them saying, ‘Why am I so much in credit?
“‘Please can you give me back the £300 of my money that you’re sitting on?’”
On another page of his website, Martin provided more detail about why this happens. He said: “To set your monthly direct debit, most firms take your annual cost and divide it by 12 (a few do it seasonally), aiming to smooth things out so you avoid high-use winter bill shocks. It’s a good budgeting concept, one I’d probably call for them to introduce if it didn’t exist, as long as you understand.”
He added: “Monthly direct debits are based on an estimate of usage. If the estimates are wrong, which is common, they can leave some unnecessarily overpaying with too much credit or others getting into too much debt.”
For more information, visit the MSE website here.
