Urgent April energy bill warning to people paying monthly costs by Direct Debit

An estimated 10 million households paying for their energy usage by Direct Debit could end up paying an inflated bill next month, despite the price cap dropping by 12.3 percent from Easter Monday. The only way to ensure energy bills are accurate is to submit a meter reading before the new Price cap starts, which means doing it before midnight on Sunday, March 31.

However, people with a smart meter and paying by Direct Debit do not need to take any action. Earlier this week Martin Lewis shared the latest times for people to submit meter readings to their provider, with some accepting them (and backdating any over-estimated costs) up until April 14.

Speaking in his latest BBC Radio 5 Live Podcast, the consumer champion explained that this is ‘energy meter reading week’ and said the reason he stopped advising people to take the reading before midnight the night before a new price cap is because energy firm websites were crashing. But he still advises doing it before the new price cap starts.

The average household energy bill is to fall to its lowest point in two years from April 1 after Ofgem lowered its price cap in response to wholesale prices. The current price cap will drop from £1,928 for a typical-use dual fuel household to £1,690, a drop of £238 over the course of a year or around £20 a month.

The average household on a standard variable tariff (SVT) is expected to spend £127 on energy in April, compared with £205 in March, due to a combination of cheaper rates and lower usage as the weather warms up.

Those on SVTs who do not have a smart meter and do not submit meter readings on or around April 1 risk having some of their usage after that date charged at the previous, more expensive rates.

Comparison website Go.Compare warned that the difference between a week’s worth of energy at the old rates compared with a week in April will be around £5 for the average household.

Gareth Kloet, energy spokesperson for Go. Compare energy, said: “By submitting a meter reading on March 31st, before the price drop comes into force, it will mean that your energy company cannot charge you at the higher rate for any units that have been used after that date. As well as taking a meter reading when the price cap changes, it’s worth providing your energy company with an up-to-date reading on a regular basis so they can work out your bills accurately, otherwise they will estimate your usage which means you could be paying more than you need to.

“While this latest drop in the price cap is good news, household bills are still high for many. However, there are small changes you can make to save energy and ultimately money, such as washing your clothes at a lower temperature, turning your appliances off when they are in standby mode and ensuring you are using your water efficiently. All of these steps can make a difference to your bills.”

Gareth also suggested it might be a good time to start looking at fixed tariffs, or asking your energy firm for a refund if you’re sitting with a fair bit of unspent cash in your energy account.

He said: “This latest price drop might make it tempting to lock in a deal and protect yourself from future increases – but there are a few things to think about before you do and it’s important to think about what’s right for you and your circumstances.

“For example, it might be worth looking at your current energy usage and the rate you are currently on, whether that be a variable or fixed rate tariff. Find out if you have to pay any early exit fees if you leave before your current deal is up. A comparison site will help you weigh up these choices and provide a simple way to see what’s available in the market.

“Also, if you’re lucky enough to have a balance in credit with your energy provider, try to keep it in the bank in preparation for the winter months.

“If you are struggling to make payments and are concerned about energy bills, always talk to your energy provider in the first instance, as they have a duty to help. Do not be tempted to skip payments or just not pay – get in touch with them and they will discuss a payment plan with you.”

Go.Compare has a list of practical things that you can do to save on your energy costs in the home which can be found here.