Martin Lewis’ MSE issues warning for half a milllion energy customers over smart meter loophole – will you pay more?
MARTIN Lewis' MoneySavingExpert.com (MSE) has warned that more than half a million energy customers with smart meters could be paying more.
Scottish Power smart meter customers may be paying 5% more than what is displayed on their in-home displays (IHDs), according to MSE's own research.
The discrepancy is due to the exclusion of VAT on the IHDs for credit customers.
Scottish Power is the only major energy supplier in the UK to adopt this practice.
Across Great Britain, there are approximately 33million smart meters in homes, the majority of which function uniformly.
However, Scottish Power has taken a different approach that could cost its customers more.
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Scottish Power stands alone among nine major energy suppliers in not displaying VAT on the IHDs for credit customers - those who pay by Direct Debit or upon receiving a bill.
This omission means affected households must manually add an extra 5% to their bills to account for the missing VAT.
For households with typical energy usage, this translates to an additional cost of approximately 20p per day for direct debit customers and around 22p per day for those who pay upon receiving a bill.
While energy regulator Ofgem does not mandate suppliers to include VAT on smart meter monitors, Scottish Power prepayment meter customers do see VAT included in their IHD prices.
Scottish Power claims the change for credit customers was made in response to customer feedback, although the company has not specified when this change was implemented or how many households are affected.
WHAT CAN I DO ABOUT IT?
You can check your Scottish Power bill to see how much you're paying for your energy, including VAT.
You can do this online by visiting www.scottishpower.co.uk.
Customers can also check their bill through the free Scottish Power app available on Android and iOS.
However, if having VAT shown on your IHD is super important, you'll need to switch supplier.
Martin Lewis' team said that British Gas, EDF Energy, E.on Next, Octopus Energy, Ovo Energy, So Energy, Utilita, and Utility Warehouse, all have VAT is included in IHD prices
Customers can use the website's Cheap Energy Club to find the best tariffs available by visiting www. clubs.moneysavingexpert.com/cheapenergyclub.
How do I calculate my energy bill?
BELOW we reveal how you can calculate your own energy bill.
To calculate how much you pay for your energy bill, you must find out your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.The standing charge is a daily charge that is paid 365 days of the year - irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details, you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type - this will give you your usage costs.
You'll then need to multiply each standing charge by 365 and add this figure to the totals for your usage - this will then give you your annual costs.
Divide this figure by 12, and you'll be able to determine how much you should expect to pay each month from April 1.
SMART METER BASICS
The gadgets were first introduced to homes in 2011 and initially, the government gave a target of having one in every home in the UK by 2020.
But the deadline has since been pushed back to 2025.
It doesn't cost you anything to have a smart meter installed - your energy supplier and you won't be charged - so get in touch with them and make an inquiry.
Smart meters are designed so that you no longer need to send energy suppliers traditional meter readings.
This makes your bill more accurate, too, as it's based on readings from actual usage rather than estimates.
The devices also let you track your energy use at night, during the day, and at peak times.
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An in-home display is also usually provided, which connects to the meter and shows your energy usage and the cost in pounds and pence.
You can save money on your bills using a smart meter - notably by being able to take part in energy-saving schemes which reward you for using less energy at peak times.
What energy bill help is available?
THERE'S a number of different ways to get help paying your energy bills if you're struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don't think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have grant schemes available to customers struggling to cover their bills.
But eligibility criteria varies depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don't need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill, and some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you're struggling.
Get in touch with your energy firm to see if you can apply.