Back around Halloween our Manchester property accountants warned of an imminent rise in utility bills as fixed-rate tariffs came to an end, and we suggested that landlords might want to help their tenants compare utility suppliers to make sure they were getting the best price.
Rent and utilities are two of the most important monthly outgoings for rental households, but many tenants will prioritise keeping the lights and heating on rather than paying their rent on time – so it is well worth helping them out if they are not experienced at switching utility suppliers.
The Halloween warning came from GoCompare, who have now found that two thirds of Direct Debit customers are actually in credit on their utility bills thanks to over-estimated average payments, to the tune of £86.60 per household.
A quarter of households surveyed were in credit by over £100, but only 27% had been automatically refunded due to their balance being significantly in the black; 21% had asked for their monthly payments to be reduced as a result; but only 11% had specifically requested a refund of the overpayments already made.
In 39% of cases, householders deliberately left the positive balance in place to smooth out higher bills in future months, such as during the winter when lights and heating are switched on for longer.
Ben Wilson from GoCompare Energy said: “Direct Debit payments are a good way of settling your utility bills. They spread the cost of your energy evenly across the year so you know what you’ll pay each month, and most suppliers offer a discount for payments made in this way.
“However, the way Direct Debit payments are calculated can mean that some customers end up paying more than they need to.”
While for many households this isn’t a problem, our property accountants would urge landlords to check that tenants are not sitting substantially in credit on utility bills to the detriment of being able to pay their rent on time.