Why does my energy company hold onto my money?

by , Senior Advocate Energy & Home 30 June 2011
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The other day I got a nice surprise when my energy bill arrived in the post, and found I’m in credit by £100! Great, but if I’m in so much credit, why is my money sitting in my energy company’s bank account?

hands grabbing money shutterstock_1364005

I’m not the only person asking this question. Which?’s executive director, Richard Lloyd, is on Radio 5 Live all week talking about consumer rights, and on Monday a listener raised this precise issue.

Give me my money back!

So what can we do about it? Well I thought that one option would be to phone up the energy company in question and ask them to give it back. It wasn’t that easy.

They explained that the £100 I had in credit was only partly refundable because, although my gas bill was up to date, I hadn’t been billed for electricity since April. Confused? I am.

So I paid £66 on my last bill, submitted two meter readings shortly afterwards and got a statement saying I’m over £100 in credit. Wouldn’t this suggest that I paid too much on my last bill and that, not only should I get a refund, but they should also adjust my direct debit?

Well no, not according to Michael, the customer service rep who explained four times why this wouldn’t happen. I still don’t understand the reasoning. Perhaps it will all become clear when I over pay again in October?

Why’s it so complicated?

But should we really have to go to so much hassle? A colleague of mine at Which? was also in credit a few months back and the energy company simply paid back the amount without him even having to pick up the phone.

I accept that when paying by monthly direct debit, there needs to be a certain amount of flexibility – since you’re likely to be in credit after the warm summer months and in debit after a cold winter. These payments should balance out in the end. And I also accept that it’s our responsibility to make sure our meter readings are correct, by informing our energy provider every three months.

But it looks like energy companies have far too much leeway to arbitrarily decide what their policy is when our accounts are in credit. For instance, British Gas automatically refunds you when your £200 in credit, compared to E.ON which does so when you’re only in £5 credit.

At the end of the day, most of these companies will simply return the money if you ask for it. But should we have to when it’s our money they’re holding on to? After all, what would you prefer; money in your bank account earning you interest, or in your energy companies’ coffers?


Add your comments



I recently, a couple of months ago, switched away from First Utility. I informed them before I switched, via their website, and asked them to refund the nearly £200 pound I was in credit.
Did I get my money back? No, in fact they continued to bill me for a further 6 weeks when I was nolonger their customer!

I phoned them to ask what was going on and why they had not refunded MY money. I was unbelievably told that they could not refund the money straight away due to a fault with their system. Presumably the same problem they had in June 2013 when other customers were complaining that they didn’t get their money for 3 months.

It is surely not acceptable that First Utility appears to have a policy of keeping money from their customers for a number of months after they have left. To me this can only be so that they can earn interest on the money that they keep in their corporate bank account.

They are not doing themselves any favours by adopting this policy as I, and I sure other ex-customers, will be letting everyone know what they do.


Colin G

I am having the same problem having switched away from First Utility in April, who has the cheek to debit me another £125 more than a month after I switched. They have now at last agreed to pay the £238 they owe me, but have said it could take another 15 working days. Unacceptable, and I won’t be going back to them.

Taking a wider view, this surely is one more downside of a market where all the ‘competition’ comes from small, understaffed billing companies, not real competition between actual energy suppliers.


john wiggins

whatever you do stay away from this company full of excuses but very little action, left after very poor service no bills for 7 months then left for weeks waiting for my £200+credit refund, very bad company.


derek shawcross

i have been fighting british gas now for eight years yes eight year for money they owe me witch is £3066,33p they tell me it will go in my bank but never does now after eight years of phone calls and hundreds of pounds later i,m still not got it, i told them i won,t interest on it as they would if it was me,i have a letter of them admitting they owe me but getting it well yes i am still waiting, the phone calls can last up to one hour plus times that by eight years it,s a lot of my time and money,



I am having similar problems with being billed for a meter that doesn’t exist by Spark Energy. @Derek Shawcross, go to the ombudsman ASAP, that is far too much money to me missing!


Sarah britton

I have £5000 credit with npower for electricity. They will not refund until a third party meter reader comes to the house and they require 11 days notice when I will be away on holiday. Despite this credit npower increased my direct debit by £100 this month!
Almost a year ago when I was over £3000 in credit I started the long process of dealing with customer services. No one in that organisation uses any common sense or is able to over ride the policies and procedures that result in so many dissatisfied customers.



I am still having trouble getting my money back from my previous energy supplier, First Utility.
It would seem it is common practice for utility companies to keep hold of their customer’s money for about three months.

I have therefore set up an e-petition on the government website, not the sort of thing I would normally do, to see if they can be forced to change.

Feel free to sign it http://epetitions.direct.gov.uk/petitions/68188


Colin G

Excellent move – I have signed the petition. It won’t have much effect unless it is well publicised – maybe Which? could encourage people to sign it through their campaigns?


Ellie M

I guess where one stands on this situation depends on one’s personal circumstances. I am currently feeling frustrated as a result to my energy company’s move to refund any credit balances each quarter, as a result of pressure in the press, and as a result, Government action. I am living on a low income currently, and as a result pay my energy bills by monthly direct debit, for three reasons: a discount is applied if one pays this way; paying a fixed monthly amount makes it easier to budget, very important when one is on a low income; by paying a fixed monthly fee, I avoid the fluctuations between lower summer, and higher winter bills (I would not be able to pay a large winter quarter bill if I had to pay it in one chunk). The whole point of paying a fixed monthly amount is to smooth out these ‘peaks and troughs’, and a credit balance is built up over the lighter, warmer months, when fuel consumption is lower, which is then used during the darker, colder months, when consumption, and thus bills rise. Therefore, if one is using this system, one will automatically always build up a credit balance over the summer period. This is a good thing! I don’t think this is rocket science, nor do I think that this is a reason to harangue the energy companies for ‘holding onto my money’!!! Everyones circumstances are different, and thus how they wish this issue to be handled will vary. Customers are legally entitled to request the energy companies to return any surplus funds on their account, and they are also entitled to request an energy usage review, if they feel they are paying too much by direct debit, and if their useage confirms that they are over-paying against their actual and projected useage, then they can reduce their direct debit accordingly.

I suspect this issue has become inflamed as a result of customers (see other comments above), receiving poor customer service from their energy companies, regarding refunds of surplus balances, and also over the issue of reducing direct debits. I would like to make it clear that I am an ordinary customer, and neither I, nor anyone I am related to, or know, have any connection with any energy company, otther than as a customer. I am pleased to say that I have not experienced these problems with my energy company, Southern Electric. Thier customer service is excellent; any queries are handled promptly by friendly, helpful and efficient staff, who know what they are doing!! Not just my personal experience, they have won many awards for their customer service. I would encourage anyone who is unhappy with thier energy provider to do a price comparison with their energy company versus Souther Electric, and if the fugures stack up, to seriously consider moving to them. I have requested a partial refund of funds from them in the past, and it was handled promptly, efficiently and politely, with no hassle, and the monies arrived promply too!

As a result of of the public ‘fury’ over energy companies having credit balances on their customer’s accounts, I am now being caused difficulty. Paying monthly, and building up a credit balance to use towards the higher-cost winter months helps me to budget, but now, as a result of public and Government pressure, my energy company are now obliged to return to me any balance over £5, every quarter. This completely negates the effect of being able to ‘save up’ towards the colder months. One is then left with the problem of where to ‘set aside’ , and account for, these funds, so that they are available when needed. On a low income, I cannot aford to use these funds for other things, as I would not be able to find the ‘extra’ when the heavy Autumn/Winter bills arrive. It my seem a lovely thing to get a ‘bonus’ payment from the energy company, but the on-going energy useage still has to be paid for. I think this action over the returning of such small balances has resulted in a ‘knee-jerk’, not-thought-out-properly ‘solution’, and I think that the full implications of this wil only become apparent as time goes on. I can forsee this system resulting in a lot of confusion for customers, unexpected large bills which may be difficult to pay, and ultimately potential hardship for customers, particularly those on low incomes, families struggling to make ends meet, and those who are less good at managing their finances, or just down-right irresponsilbe with their money. Be careful what you wish for!

Surely a much more sensible system would be an ‘opt-out’ system whereby credit balances over £x (and I would suggest that the current £5 is a litttle low) are automatically returned to customers (if that is what the majority wish), unless they ‘opt out’. The energy companies could have a simple ‘opt out’ tick box on their account, which could be selected by customers on-line, or by returning a form the companies could send out. This way all customers needs and wishes could be accommodated, instead of just some. I know I am not alone in thinking this,as when I contacted my energy company to query why they had returned the credit balance, the customer service representative commented that he had had several other customers calling to ‘complain’ about their funds being returned! if you agree with me, why not make your views known to you energy company (seniour staff will always have more impact, as they have the poewr to change policy), and very importantly, to your MP, and or, the appropriate Government minister. I suspect we are storing a up a great deal of hardship and worry for many people, as we enter the Autumn and Winter period of higher useage and bills.


bud abb

Dear Ellle,
I understand your frustration but you and so many other consumers are missing the point.
In the very old days, the meters were read perhaps one a quarter and you then paid the bill up to perhaps a month later. The energy company carried the cost and you were never in credit. Because costs have sky-rocketed another plan is now necessary.to even out payments
At he end of summer, like now, start with zero credit, estimate the total cost for a year, devide by 12 and set that as your monthly payment.
OK during the winter you will have a debit balance but, the energy company will accept that just like they always used to. They are in business for profit, why should you help finance their operation


Ellie M

Thanks for your comment, but I’m not missing the point. I provide meter readings every quarter to my energy company, so my bills are pretty accurate. This takes only a couple of minutes, and I would have thought it worth the effort for people who are finding the system so frustrating. My energy company is always happy to discuss and implement changes to my direct debit, and has been swayed by my decision where I have felt that an increase was perhaps too much. I have also never had any problems in obtaining a refund when I requested one.

Yes, the energy companies are in it to make a profit; given this is it realistic to think they will tolerate all their customers being in debit for the Auntumn/Winter period? Would you, if you were running the company, and had share holders to account to? Things may have been done one way in the ‘old days’, but frankly times change, and the chasng of profit has become an ever stronger motive behind thier actions. We may not like it, but this is the truth of the matter. What you suggest as a new way of spreading out payments actually entails the energy companies effectively extending all their customers credit over the Autumn/Winter period. This is not realistic, and would cost them, and when they experience cost, they pass it on to us.

Regularly providing a meter reading to your energy company will certainly enable you to reach a more accurate figure for your direct debit payment, and your energy company should be happy to discuss this with you, and together arrive at a sensible figure, so that you don’t have too large a surplus. However, don’t forget that energy useage can vary greatly from year to year (for instance those very cold winters we had a couple of years ago, against much milder ones more recently). The energy companies do not have crystal balls with which to predict exactly what the weather will be doing a year ahead, and so make their predictions based on previous useage. They have to come up with a figure somehow……. what other way would you suggest?

If customers are not happy with paying by direct debit on a monthly basis, and thus building up a credit to carry them forward, they are under no obligation to do so. Each and every customer is able to pay their bill on a quarterly basis. Supplying a meter reading on a timely basis would also ensure that the bill uis accurate, and you only pay for what you have used. No credit balances!!

Don’t forget, if meters were read by the energy companies as frequently as in the ‘old days’, they would have to employ more meter readers to facilitate this, which would of course mean more expense….and guess who the extra cost would be passed on to…? Yes, us the customer!! Do you really want your energy bills to go up as a result of this, when it is quick and straightforward to read one’s gas and electric meters once a quarter. Sometimes one has to help oneself to achieve the best outcome!



Ellie M – I know that energy companies do try to keep us in credit to help us cope with winter bills, but is there a problem with simply keeping sufficient funds in your bank account to ensure that you can pay your bill? In recent years, many have found themselves in credit by hundreds and sometimes thousands of pounds.

My preferred choice would be an online account where I pay for what energy I use. That is either not an option or would cost more, so for years I have had to put up with accumulating credit and sometimes rising direct debit payments even when I am well in credit. e.on did this and Scottish Power have told me that they want to keep their customers in credit. I’m prepared to provide my meter readings as often as needed but I don’t want to be more than £100 in credit at any time.


bud abb

Sorry Ellie but I still believe you are not looking at this correctly. Nearly all commercial companies use credit to set up their business and factor the cost of this into their operations. They have to pay for this credit just like we do when we get o loan or a mortgage. If they paid interest on our credit balance that would be a different matter but that’s not the case. I guess you wouldn’t think to give money to Waitrose or ASDA to help them buy their stock so why be different for the energy guys. They have to buy gas and electricity to sell on to us in much the same way.
It is unfortunate that far too many instances of overcharging via the direct debit system have occurred and the companies are usually the culprits but it is up to us to prevent this.



Please Patrick, cd you see to removing my subscripton is cancelled and that I do not receive any further
stuff in my Inbox…. thanks



I switched from Scottish power on the 6th of June this year, confirmed the switch via email as i don’t trust the auto switch from the comparison sites, and was told they had all the info needed and my refund of around £300 would be arranged.

Now 3 months later, 3 hours on the phone, numerous complaint emails to their “escalation team” (who are obviously overrun) and the refund is still unpaid.. SO many different excuses its not worth listing, but if i owed them money for three months and many broken promises to pay would the bailiffs arrive on my door step?? perhaps i could try this ?

Its so one sided- however i have learnt to NEVER allow a credit to build up with my supplier in future, better to be a little behind and top up if possible.. Scottish Power have taken the biscuit in terms of the worst customer service i have ever experienced however. Well done for going straight to the top of the class!



I have just applied for a refund from OVO as I am £349 in credit iam told I can only have £193 and this takes 14 WORKING days which is nearly three weeks before I see it. This has really got to stop if I told them they would have to wait three weeks I would hear from them almost daily for their money but when its yours tough seems to be their attitude.



My dad has just had an E.on statement stating he is £750 in credit on his prepayment electric meter! I rang up and after a nice young girl called Emily carried out an investigation, we were told nothing is owed to us and we owe them nothing either, everything is clear. Her “explanation” was very confusing and after giving her the meter readings we were told everything was correct, so where did this £750 come from, where did it go and why? I’m very concerned about this in case my dad was entitled to a refund and they’ve just made it disappear! I’ve tried contact on facebook and twitter, and don’t fancy wasting my money phoning up again (on a line I was assured is free to call) I’m not holding my breath for any help but I’ll never recommended them to anyone.



Liza: The first thing they will ask you is for your up to date meter readings so it is useful to have this info at the ready before you phone. They will then deduct what is owing from your last account/statement. If you are still unhappy with this try phoning them back [you may get to speak to someone else who makes the position clearer,] explain the problem and exactly what you want them to do about it and that they have 8 weeks in which to resolve it or you will refer the matter to The Ombudsman who will investigate if a complaint has not been resolved by that time.

You can find a full explanation about this procedure at Ofgem.govt.uk/understanding energy bills.



…………..sorry Liz not Liza!



Npower have over £425 of my money in credit! my meter reading is up to date my bills are up to date but after several promises they still will not give me my money !!HELP



Npower came at the bottom of the list for customer satisfaction according to a Which? report earlier this year. Energy companies are generally poorly trusted, other than by their shareholders.

I lost count of the number of times that I had accumulated a substantial credit balance to e.on and their predecessor, Powergen. Every time I called they would take prompt action. Unfortunately, they kept on pushing up the direct debit again and I eventually left them.

In her introduction to this Conversation, Miranda says that most companies will refund money. What reason does Npower give for holding on to so much of your money?



They give no reason just one promise after another



Perhaps it’s time to switch provider. Then Npower will be forced to give you your money. :-)

When I switched from e.on I phoned and told them why I was changing supplier, mentioned the Which? campaigns to sort out the energy supply companies, mentioned discussions on Which? Conversation and instructed them to remove my contact details so that I would not receive nuisance calls trying to try to get me back as a customer. Before my contract with Scottish Power had started, they told me that they try to get customers paying by direct debit to build up a credit in the summer months to offset greater use over winter. Fortunately, they have not kept pushing up the direct debit payments in the way that e.on did, so I’m not too much in credit.

Best of luck Rob.





Ellie M

Rob, sorry to hear about your problems getting YOUR money returned by Npower. I’d ask to speak to a Manager, (insist), explain the shodddy way in which you’ve been promised your money back, but not received it, and state that if your money isn’t returned promptly (ask for a date by which they say they’ll get it back to you), you’ll go to the Ombudsman with the complaint.

N.B. shockingly, all the energy companies seem to ‘need’ 14 working days in which to return your money, which in these days of computers seems unbelieveable. Has it been longer than this since you last called them to request your money back? I believe they have 8 weeks (!) in which to resolve your complaint, but this would start when you first called them. Keep a note of dates/times you spoke with them, and get names too. It’s wonderful how having a note of someones’ name can make them get their finger out!

Also, if you do have to go to the Ombudsman, they will want this sort of information to prove that you have been requesting the refund, and over how long, and that Npower have not acted correctly in delaying re-paying you. This will help them to have the correct information with which to reach a decision over your complaint……helping them helps you….

I know it’s a faff, & of course you shouldn’t have to do all this (if Npower acted properly), but worth it in the long run, if it gets you your money back, which doesn’t seem to be happening at the moment!

If you do need to resort to the ombudsman, there is more info about how to do it at:


I’d also be tempted to threaten them with the TV programme Watchdog…..

Once this has been resolved, I’d be temped to find another energy company, if this is how they treat their customers, or, as another poster has suggested, leave them, & then they will have to refund you….

All energy customers are entitled to an annual energy review, so I’d suggest always doing this. At the same time, you can check that you are on the best tarriff for you (they should advise you if you ask). To check if your direct debit is about right for your useage, check your previous bills for the last year, which will give you a guide, and divide the figure by 12, to give an approximate monthly figure. Don’t forget to allow for any price increases, though. This will be approximate, but should get you close to the figure you need to pay to cover your useage.

I’m with Southern Electric/SSE, and can honestly say their customer service is fantastic (including no problems with obtaining my money back when my balance got a little too high). They are friendly, polite, and helpful, nothing is too much trouble, and most importantly, they do things when they say they are going to! They’ve won lots of awards for their customer service, so it’s not just me that likes them! If you do want to change energy companies, I’d recommend at least considering them, for a hassle-free life!

Good luck, and I hope your money is returned to you soon…….


W Brown

My mother died in January 2011, and I was sorting out her finances. When I checked with Scottish Power (giving them a final meter reading), I was shocked to hear that she was £1,200 in credit. How many more people are unaware of money these power companies are sitting on that belongs to the consumer. We shouldn’t have to approach them for repayment, this should be done automatically at least once a year as soon as a customer reaches £100 or more in credit!

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