Most people pay for gas and electricity by a fixed monthly direct debit, the same amount in July as in January. That smoothing is convenient, but it also makes it hard to tell whether you are paying a fair amount or quietly handing your supplier far more than your home actually uses. A big credit balance sitting in your account in spring is the classic warning sign. This guide explains how that monthly figure is worked out, gives you a back-of-an-envelope way to check whether yours is sensible, and walks through how to get it lowered or get spare credit refunded if it is wrong.
The short answer. A fixed monthly direct debit is your supplier's estimate of a whole year's gas and electricity cost, spread evenly across twelve months. It is normal to build up credit over summer and spend it down over winter. To sanity-check yours, take your annual usage in kWh, multiply by your unit rates, add the standing charges, and divide by twelve. If your payment is well above that and you are sitting on a large credit balance in spring, you can ask for it to be reduced and for the spare credit back.
How the monthly figure is worked out
A fixed direct debit is not a bill for the energy you used last month. It is a forecast. Your supplier estimates how much gas and electricity you will get through over the coming year, prices that against your tariff, adds the daily standing charges, and divides the total by twelve so you pay the same each month regardless of the season.
The forecast comes from your own history where they have it. A supplier who has served you for a year or more will base next year's estimate on the kWh you actually used, adjusted for any price changes. If you have just switched or moved in, they start from an estimate based on the property and the previous occupant's usage, which is why brand new accounts sometimes land on a payment that turns out to be miles off once your real pattern shows up.
Two homes on identical tariffs can therefore pay very different direct debits, because the number is driven by predicted consumption, not by the rates alone. That is also why a payment can look high without being wrong: a draughty four-bed with an old boiler genuinely costs more to run than a well insulated flat, and the direct debit simply reflects that.
Why building credit in summer is normal
The single biggest source of confusion is the credit balance. You pay the same every month, but you do not use the same every month. In a gas-heated home the heating is off for much of summer and running hard through winter, so a typical household uses perhaps two or three times as much energy in January as in July. Spread the cost evenly and the maths is unavoidable: you overpay in the warm months and underpay in the cold ones.
The result is a balance that swings through the year. It should build into credit over spring and summer, peak around the start of autumn, then run down as the winter heating bills land. Done right, the account passes through roughly zero once a year and the cycle repeats. A few hundred pounds of credit in September is not the supplier overcharging you; it is the buffer you have been building to pay for the winter you are about to have.
The number that should worry you is credit that keeps climbing and never comes back down. If you finished last winter still hundreds of pounds in credit, and the balance is now even higher, your monthly payment is collecting more than your home costs to run across a full year. That is the case worth acting on.
How to check yours in five minutes
You do not need the supplier's model to get close. You need your annual usage in kWh for each fuel, which is printed on your annual statement or visible in your online account, and your unit rates and standing charges from a recent bill. Then it is arithmetic.
Here is a worked example for a typical gas-heated three-bed, using illustrative rates rather than today's exact prices, since rates change and vary by region.
| Fuel | Annual usage | Units cost | Standing charge | Yearly total |
|---|---|---|---|---|
| Electricity | 2,700 kWh | ~£702 | ~£219 | ~£921 |
| Gas | 11,500 kWh | ~£805 | ~£117 | ~£922 |
| Combined | ~£1,843 |
Illustrative example only: electricity at 26p per kWh and 60p/day standing charge, gas at 7p per kWh and 32p/day. Your own rates and usage will differ; use the figures from your latest bill.
Divide the combined £1,843 by twelve and you get about £154 a month. If your actual direct debit is around that, it is doing its job. If you are paying £210 a month on usage like this, you are putting in roughly £670 a year more than the home costs, and that surplus is piling up as credit. The running-cost calculator can help you sense-check the electricity side if you want to see where the kWh go. For the wider picture of what every line on the bill means, see understanding your energy bill.
Estimated readings are the usual culprit
When a direct debit is genuinely too high, an inflated usage estimate is often behind it. If your supplier cannot see real meter readings, they fill the gap with an estimate, and estimates tend to err on the generous side. Months of estimated bills can quietly push your assumed annual usage, and therefore your payment, well above reality.
The fix is to give them accurate readings. A smart meter sends them automatically, which is one of its quieter benefits: your direct debit gets recalculated against what you actually used rather than a guess. Without a smart meter, send a reading every month or two so the account stays anchored to reality. After a run of estimates, a single accurate reading sometimes drops the calculated balance sharply, which on its own can justify a lower payment.
It cuts both ways. If estimates have been too low, a real reading can reveal hidden debt and the payment may need to rise. Either way, you want the account built on true numbers, because everything else flows from them.
When a high payment is actually justified
Not every large direct debit is an error, and asking for a cut that the maths does not support just stores up a painful catch-up later. A payment can rightly be high for several reasons.
- You are clearing a real shortfall. If you underpaid last winter and the account went into debit, the supplier spreads the recovery across your future payments. The payment is high because it is paying off energy you genuinely used.
- Your usage has gone up. A new baby at home, someone now working from home, an electric car on the driveway, or a switch from gas to electric heating all push consumption up. Last year's figure understates this year's cost. Our note on home EV charging cost shows how much a car can add.
- Prices have risen. When wholesale costs and the price cap move up, the same kWh costs more, so a steady level of usage still means a higher direct debit.
- You are heading into winter. A payment set in autumn is deliberately building credit for the cold months. Judged in October it can look high even when it is exactly right across the year.
This is why the annual calculation matters more than a gut feeling. Compare the payment with a full year of cost, not with a single mild month.
How to get it lowered or refunded
If your check shows the payment is too high and you are carrying healthy credit, you have a clear route. Start by giving an up-to-date meter reading so the account reflects reality. Then contact the supplier, point to your credit balance and your annual usage, and ask them to recalculate the direct debit and refund the surplus credit.
Suppliers regulated by Ofgem are expected to set direct debits at a fair and reasonable level and to be able to explain how they reached the figure. If you are in credit and your account is up to date with readings, you can normally ask for that credit back rather than leaving it with them, though it is sensible to keep a sensible buffer in place if you are about to head into winter. If the supplier refuses to explain or adjust an obviously excessive payment, you can escalate, first through their formal complaints process and then, if it is still unresolved after the set time, to the Energy Ombudsman, whose decision is free and binding on the supplier.
Keep it proportionate. Stripping the account to zero in October usually means a steep rise in January. Aim to match the payment to a full year of real cost, leaving a modest buffer, rather than chasing the lowest possible number this month.
The risk of setting it too low
It is tempting to push the direct debit down as far as the supplier will allow, but a payment set below your real annual cost only delays the bill, it does not cancel it. The account drifts into debit over winter, and at the next review the supplier raises your payment sharply to claw back the shortfall, often at the worst possible time. People who set the figure too low in autumn frequently face an unwelcome jump in spring.
A fair direct debit is one that matches what your home actually costs across twelve months, no more and no less. The aim is not the smallest payment; it is the right one, so the account ends each year close to level and there are no nasty surprises. If your underlying bills are the real problem, the durable fix is to cut usage rather than just rearrange when you pay for it, starting with thermostat settings and the heating that drives most of the gas figure.
The bottom line
Your fixed monthly direct debit is a forecast of a whole year's energy cost divided by twelve, so building credit in summer and spending it in winter is exactly how it is meant to behave. Check it properly before you judge it: annual kWh times your rates, plus standing charges, over twelve months. If your payment sits well above that and the credit just keeps growing, send a fresh meter reading and ask the supplier to recalculate and refund the surplus. If it is high because usage or prices have genuinely risen, leave it where it is and tackle the underlying bill instead. Either way, aim for the payment that matches your real yearly cost, not the lowest figure you can talk them into.