Energy suppliers owe 13 million households £1.8bn ($2.5bn) in credit balances, with more than 1 million consumers due more than £300, new data revealed.

This comes as energy regulator Ofgem is pushing for reforms to stop utility companies and suppliers using customers' credit balances to "fund unsustainable business practices."

Ofgem said it wants to put in place an "auto-refund" policy that would require suppliers to refund credit balances to customers paying fixed direct debit annually on their contract start date.

Those who pay for their energy by direct debit can often be in credit with their supplier as their monthly payments don’t exactly match their gas and electricity usage.

Direct debit payments stay the same throughout the year, but consumers should be in credit with their supplier after the summer, when they’ve used less energy, and in debt during winter.

Uswitch, a comparison website for home services switching, surveyed 2,009 UK energy bill-payers in April.

It found that almost half of all UK households (45%, or about 13 million) are due a refund from their energy provider.

It said the average amount households were in credit was £142.33, bringing total money owed by suppliers to about £1.8bn.

The total owed to UK households is £1m higher than last April, despite people using more energy while at home during the pandemic.

The report also found that a quarter in credit are owed a rebate of more than £200, while some 535,000 households are due more than £500.

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Uswitch said “some credit on the account is useful to have, especially where your energy supplier does not issue a bill every month - it helps with managing the energy bills. But it is important to see how much credit is still outstanding once the bill is settled, as there may be a surplus.”

Not all energy providers automatically issue refunds to customers whose accounts are in credit, so any money owed to consumers can go unclaimed.

Almost three in five bill-payers (59%) say their energy supplier has never automatically credited their account.

The report said more than a third of those in credit (35%) say their supplier has never been in contact with them to review their direct debit payments.

Ofgem's suggestion for auto-refunds could be useful for many consumers, as almost half (49%) surveyed said they do not know how to claim back a credit balance.

Uswitch.com called for suppliers to review customers’ direct debit payments more regularly.

Meanwhile the report said four million households are in debt to their supplier at the end of winter, owing £529m altogether.

The average amount of debt has fallen to £126 this year[3], down from £142 last year.

"At a time when many people’s finances are stretched any windfall would be gratefully received," said Sarah Broomfield, energy expert at Uswitch.com comments:

“Many who have been affected financially by the pandemic may be looking for ways to save money, and it’s worth checking with your supplier to see if you are owed any money following your most recent bill being paid."

She added it is important of providing regular meter readings to energy suppliers if consumers do not have a smart meter.

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