Customers on direct debit pay the same amount each month based on estimated consumption.
Typically they build up credit in the summer when use is lower and draw down on the balance in winter. But Ofgem says suppliers should reset the credit balance to zero each year because many people are overpaying. The plan could be rolled out next year.
Peter Earl, of Comparethemarket.com, said: “Proposals to return credit balances in a timely manner should be welcomed, especially given the burden the past year has placed on people’s finances. Ultimately, any credit belongs to the customer.”
Ofgem wants to limit the amount in credit balances suppliers can keep (Image: Getty )