London Daily

Focus on the big picture.
Wednesday, Feb 25, 2026

Energy firms warned over hiking direct debits

Energy firms warned over hiking direct debits

The government has warned energy firms not to hike direct debit payments for customers who are making "huge efforts" to cut usage.

The business secretary has written to suppliers asking them to ensure bills reflect what homes are actually using, and do not over-estimate charges.

Grant Shapps said he was concerned by reports that bills were rising despite people cutting back on energy use.

Regulator Ofgem has been asked to look at making billing "more responsive".

Ofgem said it had already called on firms to address the issue, but would be prepared to take further action if necessary.

Direct debit is the lowest cost method of paying energy bills, but can lead to overcharging, because suppliers calculate bills according to a customer's previous consumption and spread charges for higher winter use over the year.

Ofgem said a review conducted earlier this year identified "moderate or significant issues in a number of suppliers" and that it had taken up the issue with energy companies.

But last week, The Times reported that some customers, including those on a fixed-rate tariff, had seen their direct debit payments soar even though they had reduced the amount of energy they use.

Energy prices have been rising, due in part to sanctions imposed against Russia, a major oil and gas producer, following its invasion of Ukraine.

The government's Energy Price Guarantee has limited the amount households can be charged, so that a typical annual bill is £2,500. However, that is nearly double what customers were paying last winter, and many households are trying to reduce their energy use to keep their bills down.

Milder weather this month - which has been 2.2C warmer than the average November - has meant that some homes have been able to hold off from putting the heating on.

In his letter to the chief executives of UK energy companies, Mr Shapps said he was "disturbed... that some consumers are saying their direct debits are going up when they are making huge efforts to reduce their usage to save money at a time when household incomes are squeezed".

He told energy firms: "I am interested to understand how you intend to ensure that your direct debit system does not over-estimate charging."

"I am very keen that all suppliers find a way to make their systems more responsive to these positive changes in consumer behaviour," Mr Shapps said.

Energy UK, the industry trade body, said rising direct debits were inevitable as bills had to reflect the doubling in energy prices since last year.

"Suppliers are required to set direct debits at a level that allows the customer to pay the same amount each month, without running up too much credit or getting into too much debt," said Dhara Vyas, Energy UK's director of advocacy.

"If customers use less energy than anticipated, then they will build up credit and this will be reflected the next time the supplier reviews their direct debit.

"We know many households will be trying to cut down where they can right now but it's only when a reduction is shown in consistently lower meter readings, for example, that suppliers can reflect it," Ms Vyas said.

A recent Ofgem review found that the majority of suppliers had only "minor issues" with their processes for setting direct debits, she added.

Earlier this year, Ofgem conducted a review into how energy firms were charging customers by direct debit, following complaints about soaring charges and credit balances.

About 500,000 households had seen their payments double, according to Ofgem, despite prices rising by 54%.

An Ofgem spokesperson said that following the review the regulator had set out the changes it required from suppliers, and would continue to work with the government on the problem.

"More now than ever, customers need to be confident that they aren't paying more than necessary to manage their energy bills," the spokesperson said.

Ofgem would "not hesitate to take any further action necessary to make sure customers are treated fairly" he added.

Household energy costs are set to rise again next year.

Last week, Ofgem announced another increase in the official price cap - the level energy bills would be without the government intervention to keep bills down. Ofgem said without the Energy Price Guarantee from January the typical annual energy bill would have been £4,299.

While the government support will continue, it is being scaled back from April, when a typical annual bill will increase to £3,000.

Some groups across the UK, including those on means-tested benefits, pensioners and some people on certain disability benefits will receive cash payments.


Newsletter

Related Articles

0:00
0:00
Close
Lord Mandelson Condemns Arrest as Driven by ‘Baseless Suggestion’ He Would Flee Abroad
Former UK Ambassador Released on Bail Following Arrest in Epstein-Linked Investigation
UK Parliament Orders Release of Former Prince Andrew’s Government Vetting Files
Reddit Fined £14 Million by UK Regulator Over Failures in Age Verification Controls
UK Moves to Tighten Regulation of Netflix, Disney+ and Prime Video Under New Media Rules
British Woman Who Reported Rape in Hong Kong Faces Possible Prosecution
'Christianity is the religion that has made this country great.'
Man Receives Parking Ticket 38 Years After Offense: ‘City Officials Said It’s Legitimate’
Woman Receives Gift Card for Christmas – Discovers It Is ‘Worth’ 63,000,000,000,000,000 Pounds
UK Sanctions New Zealand Insurer Maritime Mutual Following Allegations Over Russian Oil Cover
Reform MP Danny Kruger Condemns UK’s ‘Unregulated Sexual Economy’ in Call for Tougher Controls
The Show Must Go On: Prince William and Kate Middleton Shine at the BAFTAs Amid Andrew’s Arrest
UK Sanctions Russian ‘Illicit Oil Traders’ After Email Blunder Exposes Sanctions Evasion Network
Russia Amplifies Baseless Claims That UK and France Plan to Arm Ukraine with Nuclear Weapons
UK Imposes Sanctions on Two Georgian Television Channels Over Alleged Russian Disinformation
United States National Parks See Noticeable Drop in Visitors from Canada, U.K. and Australia
UK, Australia, Canada and New Zealand Escalate Sanctions on Russia as Ukraine War Marks Four Years
I Gave Andrew a Nude Massage Inside Buckingham Palace
UK Economy Faces Acute Strain as Trump’s Global Tariff Reshapes Trade Landscape
UK Signals Retaliation Is Possible as New US Tariff Policy Threatens Trade Stability
British Police Arrest Former Ambassador Peter Mandelson in Epstein-Related Misconduct Probe
Australia Officially Supports Proposal to Remove Andrew Mountbatten-Windsor from Royal Succession
Victorian Premier Jacinta Allan remains silent on ISIS brides' resettlement plans in Melbourne
Former UK Ambassador Peter Mandelson Arrested in Connection with Jeffrey Epstein
Jacob Rees Mogg afraid to talk about Peter Mandelson arrest on “suspicion of misconduct in a public office” (Pedophilia, corruption, etc.)
United Nations Calls for Global Action Against Disinformation and Hate Speech Online
Tucker Carlson warns of an inevitable clash in Western societies over mass migration
President Trump warns countries against abandoning recent trade deals with the US
Diverging Polls Show Mixed Signals on UK Economic Revival as Confidence Remains Fragile
Spotify Expands AI-Driven ‘Prompted Playlists’ Feature to the United Kingdom and Other Markets
Greens and Reform UK Surge in Manchester By-Election, Threatening Labour’s Historic Stronghold
UK Businesses Push for Closer European Trade Links Amid Renewed US Tariff Uncertainty
Deloitte Global Overhaul Sparks Leadership Contest in the United Kingdom
University of Kentucky and Microsoft to Showcase Campus-Wide AI Innovation
UK Food System Faces Acute Vulnerability to Shocks, Experts Warn
Reform UK’s Proposed ICE-Style Deportation Scheme Triggers Sharp Backlash
U.S. Global Tariff Push Leaves Britain, Australia and Others Facing Higher Costs and Trade Strain
UK Police Officers Guarded 2010 Epstein Dinner Attended by Prince Andrew, Reports Say
US Trade Representative Affirms Commitment to Existing Tariff Agreements with UK and Other Partners
Activists at the Louvre hung a framed Reuters photograph of Andrew Mountbatten-Windsor slumped in the back of a car leaving a police station on the day of his arrest
The royal biographer said that he expected the police to 'look at the money trail' - including Sarah Ferguson borrowing money from Epstein
A Protestor screams in NYC: “Bill Gates is on the Epstein’s List…”
FBI and Secret Service Hold Press Conference After Shooting Incident at Mar-a-Lago
Mark Zuckerberg Testifies in Trial Over Social Media's Impact on Children's Mental Health
Maggie Oliver exposes Keir Starmer using letters to close child rapists investigations
Kouri Richie's wrote a children’s book to help her sons grieve the death of their father. Now she’ll stand trial for his murder
New York Braces for Major Snowstorm With Up to 18 Inches Forecast and Blizzard Warnings Issued
Mexican Military Kills CJNG Leader Nemesio Oseguera Cervantes as Violence Erupts Across Jalisco
Metropolitan Police Deploys Palantir-Powered AI to Flag Potential Officer Misconduct
UK Parliament Rebukes Police Over Ban on Israeli Football Fans
×