As the cost of living crisis continues with rising bills, a pair of new renters decided to research all of the life hacks they could use to save money in their home. Despite turning off standby appliances, turning the thermostat down and using the washing machine during off-peak hours, their direct debit payments continued to rise.
The soaring bill caused them both a great deal of stress through the rising costs, but also the pressure of trying to find out why they were overspending. As they were on a standard variable tariff with EDF and pay via direct debit, the couple were expecting some fluctuation with prices due to the current circumstances, but found their monthly bill for two people was costing more than the average amount for a family of four.
The new renters only discovered the cause when they had a small leak repaired, and discovered they had left their immersion heater on which was racking up significant bill, as the heater uses electricity to heat water even if you have gas central heating. The heater has been dubbed as insufficient by Which experts because it is pricier than gas due to the fact it uses electricity all the time to heat water, and can be even more costly if it has no thermostatic control reports The Manchester Evening News.
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One of the renters said: "After seeing the immersion was on the plumber asked 'if we had experienced any issues with our boiler', I'm assuming he thought that could have caused the leak. After saying no and that our boiler was running fine we quickly realised our mistake. We had been throwing money away by using our immersion every day.
"We moved into our first house but in early summer last year our bill went up from £125 per month to £240, even though we knew a rise in price was coming given the price cap at the time, this was a lot more than expected. From here we did everything to get the bill down (during summer so our heating wasn't on) used gas appliances more efficiently and made sure we submitted readings before the price cap rose once again in October."
She explained that the October 2022 price cap came at the same time as their EDF direct debit review, where customers are made aware of any account credit. Adding: "We were defeated at the minimal credit amount on our account, less than £100, and continual £240 bill.
"It wasn't until we had work done on a small water leak we realised that we had been ridiculously overspending by using our immersion heater. And by turning it off in October we have now accumulated £372 in bill credit, which is not surprising now that we understand how immersion heaters work and how much they cost to run."
What is an immersion heater and how much do they cost?
Some houses have a boiler and an immersion heater, which can be turned on as back up for hot water in case something happens to the boiler, such as it breaks or requires a service. The heater uses electricity to heat the water inside the cylinder, similar to a kettle.
However, many people are not aware of how the heater works and how it should be used. The heater is connected by a cable to the mains electricity, and unlike a gas boiler it doesn't make any noise.
So if you have one deep inside a cupboard it is worth checking to see if it is on, otherwise it may be adding towards an expensive bill. Immersion heaters are able to heat large amounts of water in seconds, but are considered uneconomical to run.
According to research carried out by Best Heating, the heaters use an average of three kilowatts of electricity per hour which costs around 50p per hour.
Account credit and how to claim the money back
The new renters turned off their immersion heating once they discovered their mistake, and since October they have racked up £372 in credit, although some may be from overspending by direct debit. Those who pay their energy bills by direct debit could end up having their suppliers owe them money, as it's not typical for a household to consistently use the exact same amount of energy each month.
After turning off their immersion heater, the renters enquired about the credit on their account as that was the only way to track how much they were saving. This was not as easy as logging into an online account, and they had to choose one of three methods, including to wait for their review letter in the post (every six months) or chat with an advisor via EDF's WhatsApp or the call desk.
After calling the desk and waiting 56 minutes, they found the detailed information "incredibly helpful." One of the renters said: "By looking at the small amount of credit we had before October and comparing to now, we figured out that majority of the £372 credit was from reduced electricity usage.
"The amount of money we've saved since turning off the heater in October is a 'calculated guess' and a small proportion of the credit will be from overpaid direct debit payments. The last substantial credit amount we were aware of was £172 between November 2021 and April 2022.
"All energy companies have different policies in place when it comes to customer account credit and requesting a refund, with some accessible to claim back straight away, others at specific points in the year (depending on direct debit review) or only when you leave the provider. Our next review is March 27, 2023 so we will be able to claim back our credit from March 28."
A spokesperson for EDF has explained what customers should do if they want a credit refund. They said: "Anything over £150 at the end of their Direct Debit cycle is refunded back to the customer.
"If a customer wants a refund and has been billed up to date, they are welcome to request one. Direct Debit monthly payments will be recalculated following this as the credit would usually be used to offset seasonal spikes.
"EDF was one of 4 suppliers to be assessed by Ofgem as having ‘no significant issues’ with the way it manages its customers’ Direct Debit calculations earlier this year. This means our customers can be reassured that our Direct Debit process is robust. We’ll continue to work closely with Ofgem to make sure we’re following industry best practice for our customers."
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