Direct debits 'could surge' before energy price cap rises in October

Direct debits for energy bills could surge before the energy price cap rises in October, the former CEO of Npower has warned.

The news comes just hours before Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng were due to meet gas and electricity executives at Downing Street to discuss solutions to the predicted spike in bills.

Paul Massara, former boss of NPower, now head of Pulse Clean Energy, was asked when he thought direct debits would begin to rise and people would feel the impact.

Speaking on the BBC Radio 4's Today programme, he said: "It bites now is the honest truth.

"People will be hearing the news, getting worried and getting concerned they will be thinking about how are they going to manage when it gets to October.

"I think some of the energy companies will adjust their direct debits and that will cause people real concern.

"Typically during the summer people build up a credit so that when they go through to the winter they can pay down that credit and I think people will be looking at that and saying we probably should adjust

"It really depends on each individual company and when they set the cycle for that."

An Ofgem spokesman also admitted that it was possible bills would rise over the summer while speaking to Sky News.

They said: "Direct debits are usually charged in such a way that customers build up an appropriate credit during the warmer summer months when usage is lower, so the amount they pay is evened out over the colder winter period where usage is higher.

"It's therefore possible for direct debits to increase ahead of a price cap rise, or even when a customer's use has remained constant.

"But consumers can ask for credit balances to be returned at any time and can contact their suppliers to change how their direct debit is spread so, for example, they pay for exactly what they used in that month and do not build up a credit ahead of winter."

The cap on energy bills could top a breathtaking £5,000 next year, according to the bleakest forecast yet for struggling households.

Experts said that at Wednesday's energy prices they expect that regulator Ofgem could be forced to set the cap at £5,038 per year for the average household in the three months beginning next April.

It is more than £200 higher than previous forecasts, which were already grim, and heaps extra pressure on households across Britain.