Receiving an incorrect energy bill can cause lots of money worries and is a common problem. In 2021, customer service from UK energy suppliers hit an all-time low. Suppliers often fail to bill their customers correctly the first time. Home energy customers all over the UK deal with inflated bills, late bills, and back bills.
Energy back-billing is a large cause for concern for domestic consumers who cannot afford large lump sum payments. An unexpected energy bill from an energy supplier can cause massive budgeting issues for a household, especially at certain times of the year.
In this article, our experts explain how energy back billing works and how to deal with the energy supplier.
What Is Energy Back Billing?
Energy back-billing happens when UK energy suppliers calculate bills incorrectly. This is common when a household does not have a smart meter and the energy supplier has not received regular meter readings.
Once your supplier has realised that you have used more energy than you have paid for, they will send you an energy bill for the lump sum amount. This is called energy back-billing.
You can receive a request for the lump sum at any time. The longer you pay for less energy than you use, the higher the bill will be. Most consumers fall into this trap during winter. Domestic customers use far more energy in colder months, leading to inaccurate estimated bills.
Why Have I Received a Back Bill?
You have received a back bill because you have used more energy than you have paid for. Lots of homeowners receive similar energy bills from their energy suppliers. It does not matter which supplier you use. Any energy supplier in the UK has the right to backdate your energy bills.
An energy supplier can calculate domestic bills in a few different ways. Most home energy consumers send their suppliers regular meter readings. This is the easiest way to get accurate bills, but it does not guarantee that you will not receive a back bill.
When an energy supplier does not have meter readings to go off, they use estimated billing. Estimated billing is the result of lots of different factors, including your previous usage, how well-insulated your home is, and what time of the year it is.
Estimated billing does not reflect your actual usage. If you use more energy than estimated, you will have to deal with a backdated energy bill. Unfortunately for domestic customers, energy back-billing is extremely common. It is so common that the government has created rules and regulations to protect customers who receive back bills.
How Far Back Can An Energy Supplier Back Date An Energy Bill?
There is some good news for home energy consumers who are worried about back-billing. Ofgem, the government body that regulates the energy sector, has created back-billing rules and regulations. Even if you receive a back bill, you are protected from certain demands.
- UK energy suppliers cannot charge you for energy that you used more than 12 months ago. Even if you used a lot more energy than you paid for 12 months ago, it is illegal for an energy company to chase you for the money.
- UK energy suppliers are under a legal obligation to make the terms of back-billing clear in consumer contracts.
In rare cases, consumers will not be protected by these rules. You are not protected under these regulations if you have blocked meter readings at your property. You also forfeit these rights if your supplier can prove that you have stolen gas and electricity.
What if I Cannot Pay My Home Energy Back Bill?
If you're struggling to pay your energy bills, do not panic. Energy suppliers understand that many customers cannot pay the full amount at once. Energy companies will offer repayment plans, and you will be able to pay a fixed sum back each month. You will have to agree to an affordable amount with the supplier. If you don’t try to negotiate with your supplier, they might threaten to disconnect your supply.
If in the rare case, you cannot agree on a repayment plan with the energy supplier, you can call citizens advice on 0808 223 1133 or speak to a representative online via the web chat function to resolve your back-billing issue.
The Rules on Back Billing
There are rules that energy providers have to abide by with back billing. These rules are for micro-businesses and domestic customers.
You should not be charged for electricity or gas used more than a year ago. If your energy provider has made a mistake in billing you, they have twelve months to inform you. That is assuming that you have not avoided paying a legitimate bill. For example, you are not permitted to block your electricity or gas meter. Illegally taking electricity is also, obviously, not allowed. Energy providers need to state this in their terms and conditions.
If you do receive a bill over a year old, you should contact your supplier. You can quote from Ofgem’s rules, published on their website.
If they insist on payment, you can make a complaint to the Energy Ombudsman.
Compare Energy Prices
People who are on standard variable tariffs are more likely to receive a request for a lump sum than people who are on fixed-rate tariffs. Fixed-rate contracts offer home energy consumers guaranteed unit energy prices, whereas the unit price of standard variable contracts fluctuates with wholesale prices.
Switching to a fixed-rate energy tariff can help you better manage energy prices and your monthly direct debit. You may also want to request a smart meter eliminating the need to send a regular meter reading to your supplier. These are all easy steps you can take to help reduce the likelihood of receiving backdated energy bills.
Even if you use more energy than expected, with fixed energy prices you can rest assured that you will always pay the same unit rate. Steady unit rates can help to lessen the burden of lump sum repayment requests. It is much easier to fall into energy debt on a variable tariff, especially with surging gas and electricity markets in 2022.
It is easy to compare energy prices when you use our energy comparison generator. Our experts survey suppliers and tariffs from all over the UK to find you a suitable contract. Put your details into our generator and find the best deal for you in just 60 seconds.