Martin Lewis says May is the ‘perfect time’ for direct debit energy customers to check their accounts, as energy firms are holding over £3 billion in customer credit
Personal finance expert Martin Lewis has issued an important message to all customers of UK energy suppliers, including Octopus Energy, OVO Energy, British Gas, EDF Energy, and ScottishPower. The ITV and BBC expert stated that anyone who pays by direct debit should carry out a check, as it is the ‘perfect time’ to do so.
It is estimated that in 2026 so far approximately 16m households have accumulated credit in their energy accounts (57% of households), which typically suggests they are paying by direct debit.
Mr Lewis explained that this period of the year was the most opportune moment to check whether there are funds available to withdraw, but if you do it at the wrong time it could result in having to increase payments to cover periods of higher energy usage. For money-saving tips, sign up to our Money newsletter here
However, May was the ideal month to act, he said: “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.
“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.”
There is one task homeowners must tackle first: “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 been 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.”
He added: “So, suppose your direct debit is £200 a month. If you’ve got £600, a month and a half worth is £300 quid. So I would 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?'”
Mr Lewis recently urged customers on ‘price cap’ tariffs to consider switching to a fixed deal. The energy price cap, reviewed by Ofgem every three months (January, April, July, October), places a ceiling on the maximum unit rates and standing charges suppliers are permitted to apply to default, standard variable tariffs across England, Scotland, and Wales.
It does not place an absolute limit on bills — the greater your usage, the higher your costs. The cap applies solely to households on default tariffs.
Mr Lewis, speaking on the ITV programme This Morning, explained that if people were unsure whether they were on the price cap or not, it almost certainly meant they hadn’t fixed their energy deal — and urgent action was needed.
He said: “I was shocked that so few people knew they were on the price cap because we use this term all of the time. And I often say, if you’re on the price cap, get off the pants price cap. It’s a pants cap. But I actually don’t think people know.
“So, let’s be very plain. The price cap applies to firms’ standard variable tariff. That’s the default tariff. That’s the ‘you’ve not chosen a tariff’ tariff. That’s the, ‘I’ve not done anything when my fix ended’ tariff. It’s the do nothing tariff. That’s the price cap. If you’ve chosen to fix, if you’ve chosen a specialist tariff and you’re still within that, you’re not on the price cap. So, we are talking all those of you.”
Martin outlined that prices dropped 6.7% on April 1. He said: “What it does is it caps the unit rate and standing charge that energy firms can charge. Now, here’s the thing you need to understand. The price cap is set based on a time lag. So, the April price cap was based on wholesale rates. That’s the worldwide rates if you like between middle of November and the middle of February.
“The July price cap is based from the middle of February till the middle of May. It contains all of the Middle East conflict. So that means the current prediction is we’re likely to see a rise on the 1st of July of between 12 and 14% in the energy price cap.”
Mr Lewis explained that the cap remained in force for just three months, with the following update due in October. He added, however, that current forecasts suggested the October price cap would remain broadly similar ‘as once it’s gone up 12% it’s going to stay around there but we don’t know. That’s crystal ball gazing.’
He continued: “So that’s the position that we are currently in. But the rate that you can get switchable tariffs on the market like cheap fixes, that isn’t based on a time lag. That’s based on current prices right here, right now. So sometimes the time lag is good for you. Sometimes the time lag’s bad. Now, since we had the ceasefire, worldwide natural gas prices that also dictate our electricity prices have dropped.
“They’re not cheap, but they’ve dropped. So two weeks ago, you could not get a fix that was cheaper than the current price cap. It was about 7% more expensive. Right now, the cheapest fix is 6% less than the current price cap. And with a fix, you lock in your rate. So, you can get a fix now at 6% less than the April price cap.”
