London Daily

Focus on the big picture.
Tuesday, Nov 03, 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
House of Lords Advances Representation of the People Bill to Modernize Electoral Law Ahead of General Election
Financial Markets and Private Equity Assess Tax and Corporate Realignment Following Recent Chancellor Budget Adjustments
Justice Committee Warns Legal Aid Is a Service in Managed Decline Due to Inadequate Government Funding Responses
Royal Navy Intercepts Russian Intelligence Vessel and Warships Across Intensive North Sea Operations
Business and Trade Committee Slams Government Policy on China as Fragmented and Lacking Strategic Direction
Home Secretary Shabana Mahmood Softens Immigration Plans Following Intensive Cabinet Backlash Over Settlement Timelines
Automotive Industry Data Reveals Continued Acceleration in Battery Electric Vehicle Registrations Across British Dealerships
High Court of England and Wales Rules on Landmark Legal Challenge Regarding Local Government Housing Mandates
Department for Energy Security and Net Zero Approves Expanded Offshore Wind Infrastructure Along Scottish Coastline
Competition and Markets Authority Launches Broad Investigation Into Artificial Intelligence Infrastructure and Cloud Partnerships
United Kingdom and European Union Launch High-Level Preparations for Bilateral Defense and Security Summit in Brussels
National Health Service England Unveils Emergency Workforce Reforms to Alleviate Winter Accident and Emergency Pressures
Chancellor Rachel Reeves Finalizes Autumn Budget Adjustments to Meet Fiscal Rules and Fund Public Services
Bank of England Prepares for Interest Rate Decision Amid Rising Bond Yields and Inflationary Pressures
House of Lords Begins Detailed Legislative Scrutiny of Representation of the People Bill and Cyber Security Laws
Metropolitan Police Detain More Than Three Hundred Individuals Following Large-Scale Demonstration Outside London Embassy
Home Office Prepares Stricter Residency Rules Requiring Vulnerable Migrants to Wait Decade for Settlement Rights
Professional Mental Health Bodies Demand Statutory Regulation for Counsellors and Psychotherapists
National Grid Confirms Construction of Britain's Largest Electrical Substation to Power Teesside Data Centre
Prime Minister Keir Starmer Travels to Samoa for Commonwealth Summit Amid Debates on Economic Cooperation and Reparations
Home Office Implements Enhanced Digital Border Controls and Visa Processing Systems at Major Airports
Office for National Statistics Reports Stable Employment Participation Rates Across Regional Labor Markets
Department for Business and Trade Announces Strategic Partnership to Secure Critical Mineral Supply Chains
Scottish Government Unveils Regional Economic Development Strategy to Boost Advanced Manufacturing in Glasgow and Dundee
Treasury Officials Review Taxation Frameworks and Capital Gains Rules Ahead of Autumn Budget Disclosures
National Health Service Leaders Warn of Winter Capacity Pressures Across Acute Care Facilities
Bank of England Prepares for Key Interest Rate Decision Amid Sticky Inflation and Fiscal Policy Pressures
Home Office Expands Border Security Operations and Intelligence Sharing With European Partners
Office for National Statistics Reports Modest Retail Sales Growth Ahead of Crucial Christmas Trading Season
Welsh Government Unveils Strategic Plan to Boost Regional Technology Innovation and Digital Skills Training
Department for Environment Food and Rural Affairs Implements New Agricultural Subsidies Framework for English Farmers
Scottish First Minister John Swinney Announces Major Regional Infrastructure and Green Energy Investment Strategy
National Health Service Leaders Warn of Severe Winter Pressures and Mounting Accident and Emergency Backlogs
Bank of England Monetary Policy Committee Signals Cautious Interest Rate Path Amid Persistent Services Inflation
Chancellor of the Exchequer Rachel Reeves Finalizes Autumn Budget Framework Aiming to Close Public Sector Fiscal Gap
Department for Science, Innovation and Technology Prepares Enhanced Artificial Intelligence Safety and Cyber Defense Frameworks
United Kingdom Government Expands International Sanctions Framework Against Russian Shadow Fleet and Financial Enablers
Institute of Directors Reports Sharp Post-Budget Drop in Business Confidence Despite Long-Term Investment Intention Shifts
Chancellor John Healey Defends Sweeping Fiscal Adjustments and Household Support Packages Following Autumn Budget
Parliamentary Petitions Committee Schedules Major Legislative Debates on Special Educational Needs and Non-Stun Meat Labelling
Regional Devolution and Good Growth Fund Frameworks Reshape Local Government Funding Across English Regions
Loughborough University Economic Analysts Highlight Substantial Uncertainty Surrounding Public Sector Efficiency Savings
British Legal Sector Drives Sixty Billion Pounds in Annual Economic Output While Employing Over Half a Million Professionals
Law Society Welcomes New Better Regulation Executive While Pressing for Long-Term Legal Aid Funding Reform
Metropolitan Police and Security Services Heighten Operations Across London Ahead of Large-Scale Public Demonstrations
Bank of England Economists Scrutinize Corporate Tax Adjustments and Public Sector Borrowing Pressures
Chancellor John Healey Defends Autumn Budget Tax and Spending Allocations Following Intense Parliamentary Scrutiny
Department for Environment, Food and Rural Affairs Implements Strict Water Quality Monitoring Rules Following Severe Rainfall and Flooding
Welsh Government Unveils Comprehensive Regional Housing Strategy to Address Rural Affordability and Homelessness Pressures in Cardiff
Office for National Statistics Reports Slowing Consumer Price Inflation and Steady Retail Performance Across United Kingdom Markets
×