Energy firms held a combined £8.1billion of customers’ bill overpayments at the start of 2023, new Ofgem figures show.
One man had sent several emails to his energy firm requesting a refund but failed to even receive an acknowledgement.
The system is designed so customers have higher amounts of credit in September and October heading into the winter, but it should balance out close to zero in April and May heading into the summer.
However, MP Angus MacNeil accused energy firms of holding “too much money” and “sitting on a nest egg”.
Jon from Nottinghamshire told BBC Money Box: “Just over one month ago I asked for £500 back from my £1,400 credit and unfortunately after numerous emails, I haven’t even had an acknowledgement never mind any response as to if I can have my own money back.
“This is a much bigger problem than just me. The £8billion that these energy companies have stashed away is absolutely obscene.
“I think it’s about time these people were challenged and a better system is introduced where by customers can have more control over their cash.”
Customers have thousands of pounds in credit but are not always able to access their funds.
Energy regulator Ofgem said that “customers have the right to request their balance back at any time and be refunded in a timely fashion”.
But another customer, Dan Malcolm, told the BBC it took six weeks and hours spent on many phone calls to get just some of his money back.
The father-of-three from Dunfermline unknowingly built up £1,100 of credit with his supplier in September 2022.
He said: “It was £800 I wanted back and I thought that was fair and they made me jump through hoops to get it – it’s disgusting. It was so, so frustrating. Energy companies saying, ‘it’s your money, you can get it back when you want’ – it’s lies.”
Ofgem said protecting customers is its top priority and that it encourages suppliers to help customers spread the cost of winter over a full year to help them manage their bills.
Previously Energy UK told Money Box at the time this £8.1billion was being held as credit prices were extremely volatile and the level of government help was unknown.
Christine Farnish, a former non-executive director at the energy regulator Ofgem explained the amount of credit held by energy companies is a “real problem” that needs looking at.
She said: “It’s really concerning.
“I suspect that either they have miscalculated and they are overegging the direct debits or secondly which would be even worse, they are putting their hands in the pot to fund their own business operation.”
Energy companies holding on to people’s money can be a good thing, explained Ellen Fraser, an energy consultant and partner at management consultancy Baringa.
She said: “You keep your payments flat in the summer when your actual bills are smaller and intentionally build up credit on your account.
“You then spend that credit in the winter when your bills are bigger but you stay paying the same monthly amount which helps smooth out your bills, especially over Christmas which is an expensive time of year.”
Ofgem said in a statement: “Earlier this year, we strengthened rules regarding direct debits, which should prevent excessive accumulation of consumer credit balances. Suppliers should be basing their direct debits on the most accurate available information.”
