What is Ofgem’s Direct Debit review and what could change in 2026?

Ofgem’s Direct Debit review looks at how energy suppliers set monthly Direct Debit amounts and manage customer credit. Changes planned for 2026 may aim to make payments more accurate and reduce the likelihood of customers building up large credit balances while still keeping bills predictable across the year.

How could this review help cut my monthly energy payments?

If your Direct Debit has been set higher than needed to cover annual usage, improved rules and calculation methods could lower your monthly amount by aligning payments more closely to your actual consumption and seasonality. Your exact payment depends on your tariff, meter data, and household usage.

Why do some customers build up large credit on Direct Debit?

Large credit balances can happen when monthly payments are set too high, when usage drops, or when estimates are used instead of regular meter readings (or smart meter data). Credit can also increase during warmer months when energy use is lower.

Can I ask to reduce my Direct Debit now?

Yes. If your balance is in credit or your usage has fallen, you can request a review of your Direct Debit amount. Having up-to-date meter readings (or smart meter data) and checking your annual usage helps support a lower, more accurate payment.

Should I take a refund if my energy account is in credit?

It depends. If your credit is higher than needed to cover upcoming winter bills, a refund may be reasonable. If a refund would leave you short during high-usage months, you may prefer to keep some credit to avoid sharp payment increases later.

How can I keep my Direct Debit accurate and avoid surprises?

Submit regular meter readings (or ensure your smart meter is communicating), review your statements for estimated readings, and check your projected annual consumption. If your circumstances change—working from home, new appliances, or home improvements—request a payment review so your Direct Debit stays aligned with your usage.

What’s the best next step if I want to reduce my energy costs and payments?

Start by checking your current tariff and usage, then compare options that may better suit your household. You can explore Energy Plus plans and support at https://www.energyplus.co.uk/ to see whether switching or optimising your plan could reduce your overall costs and stabilise your monthly payments.

Ofgem direct debit review 2026: could it cut your monthly payments?

Ofgem is reviewing how suppliers set Direct Debits in 2026. If your payments feel too high, the best move is still to compare whole-of-market tariffs and switch to a better fit. Use EnergyPlus.co.uk to check options in minutes.

Understand what the Ofgem Direct Debit review means for UK households
See why your monthly payment may not match your actual usage
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Compare tariffs & cut monthly costs Read what the review means

Home energy only. Switching depends on availability and eligibility. We compare a wide range of UK tariffs; results vary by postcode, meter type and payment method.

Compare energy tariffs now (whole-of-market) and target a lower monthly Direct Debit

The Ofgem Direct Debit review is aimed at improving fairness and transparency in how suppliers set monthly payments. But even if the rules change, your bill is still driven by unit rates, standing charges and how well your monthly Direct Debit matches your actual usage.

If your monthly payment has crept up — or you’re being asked to build a large credit balance — comparing tariffs is often the fastest way to cut your ongoing costs. We’ll use your details to help you find a tariff that suits your home, meter and payment preferences.

Tip:

A “lower Direct Debit” should come from a cheaper tariff and a realistic payment plan — not from underpaying and ending up with debt at the next review.

Why this page exists

People searching “Ofgem direct debit review 2026 cut monthly payments” usually want one of two things: (1) a fairer monthly amount, and (2) a cheaper tariff. The Ofgem review may influence how payments are calculated, but switching to a better deal is still the most direct lever for reducing the cost of energy at home.

What households could gain from the Ofgem Direct Debit review (and what won’t change)

More transparent payment setting

A clearer explanation of how your supplier calculates your monthly Direct Debit — including how it treats seasonal usage, existing credit/debit and forecast changes.

Fewer “surprise” increases

Better prompts to review payments earlier, especially when prices change or your usage differs from what the supplier expected.

Still: tariff price drives costs

Even with improved rules, your monthly payments can’t be sustainably lower unless the underlying tariff is competitive for your home and meter type.

Plain-English takeaway:

The Ofgem review may help ensure Direct Debits are set more fairly. If you want to cut your monthly payments, you’ll usually need a cheaper unit rate/standing charge and a payment plan that matches your usage pattern.

What is the Ofgem Direct Debit review (2026) and why does it matter?

Ofgem is the UK’s energy regulator. A Direct Debit review focuses on how energy suppliers set and adjust monthly payments for customers who pay by Direct Debit. The aim is typically to make sure payment amounts are proportionate, understandable and reflect customers’ actual circumstances.

For households, this matters because Direct Debits are often calculated using forecasts. If a supplier overestimates your usage, or tries to build a larger-than-needed credit buffer, your monthly payment can feel inflated even when your real usage hasn’t changed.

Direct Debit vs your actual bill: the key difference

Your energy cost

What you owe is based on: units used (kWh) × unit rate + standing charge (plus any extras/adjustments). This is the “real” cost.

Your monthly Direct Debit

A payment plan designed to spread cost across the year. It may include a buffer for winter, debt repayment, or planned credit to avoid shock bills.

That’s why “reduce Direct Debit” and “reduce energy costs” aren’t always the same thing. A better tariff reduces costs; a better payment plan reduces unnecessary overpayment.

Why your supplier might increase your monthly Direct Debit

Even if you haven’t changed how you use energy, your supplier can adjust your Direct Debit when it reviews your account. Common triggers include:

1) Higher tariff rates

When unit rates or standing charges rise (including when a fix ends), your forecast annual cost increases — and so does the monthly amount needed to cover it.

2) Estimated readings

If your bills rely on estimates, a later correction can reveal you’ve used more than expected. That can create a debit balance and a higher ongoing payment.

3) Building (or rebuilding) credit

Suppliers may set Direct Debits to build credit ahead of winter. If the target credit is high, your monthly payment can feel excessive.

4) Repaying debt

If your account is in debit, suppliers often increase monthly payments to clear the balance over a set period.

If your payment looks wrong

Ask your supplier how the amount was calculated (usage forecast, tariff rates, current balance, credit target and review period). Then compare tariffs to check whether you’re overpaying because of the rate — not just the payment plan.

How to lower your Direct Debit safely (without building debt)

If you want your monthly payment reduced, focus on two tracks: (A) get the underlying tariff competitive, and (B) ensure your payment reflects real usage. Here’s a practical approach many UK households can follow.

Check your latest statement and balance. Are you in credit, in debit, or roughly even? A big debit often explains a sudden increase.
Submit accurate meter readings (or check your smart meter data). This reduces the risk of estimates inflating your forecast.
Review your tariff details. If you’re on a standard variable tariff or your fixed deal has ended, comparing can be where real savings come from.
Compare whole-of-market options. Look at unit rates, standing charges, contract length and any exit fees.
Recalculate a realistic monthly amount. A simple method is: annual cost estimate ÷ 12, adjusted for any debt/credit you want to clear over a set number of months.
Ask your supplier to explain and adjust. If your Direct Debit seems out of line with your usage and balance, request an explanation and a review.

If you’re building too much credit

Comparing tariffs can reduce the annual cost, meaning you need less monthly payment. You can also ask for a recalculation based on updated readings and a sensible credit target.

If you’re in debt

Switching to a cheaper tariff may help, but you may still need a plan to clear the balance. Reducing the Direct Debit too far can make the debt worse.

Want to act now? Use the comparison form above to see what’s available for your postcode.

Switching checklist: avoid common mistakes that keep Direct Debits high

If your goal is to cut monthly payments, these are the items that most often decide whether switching delivers the outcome you expect.

What to check	Why it matters	What to do
Unit rate & standing charge	These drive your true cost — and therefore your sustainable Direct Debit.	Compare on total estimated annual cost for your usage profile.
Exit fees	Leaving a fixed tariff early may cost more than you save.	Check your contract end date and any termination charges.
Meter type (smart / standard / prepay)	Not every tariff is available for every meter setup.	Use accurate details in your comparison; ask if a meter change is needed.
Payment method	Direct Debit tariffs can differ from pay-on-receipt-of-bill options.	Choose the method you’ll actually use to avoid surprises.
Current credit/debit	Large balances can distort what “reasonable” looks like month to month.	Request a clear balance summary and how it impacts your Direct Debit.

Local rates vary: Energy prices can differ by region and network area. Always compare using your postcode for the most accurate results.

Can the Ofgem review in 2026 reduce bills or just change payments?

It’s important to separate two outcomes:

Lower monthly payments (cashflow)

A fairer calculation may reduce over-collection and smooth out spikes — especially if you’re sitting on large credit or your usage forecast is too high.

Lower total cost (true savings)

This usually comes from switching to a more competitive tariff or reducing usage. The review itself doesn’t automatically make unit rates cheaper.

If you’re looking to cut both the monthly payment and the total you pay across the year, start with a whole-of-market comparison.

FAQs: Ofgem Direct Debit review 2026

Can I ask my supplier to lower my Direct Debit?

You can request a review and ask for the calculation. If you provide up-to-date readings and your account is in credit, a recalculation may be possible. If you’re in debit, lowering it too far may lead to arrears.

Why am I being asked to build up credit?

Many suppliers spread costs across the year and build credit ahead of winter when usage is typically higher. The amount of credit considered “reasonable” can vary by supplier and customer circumstances.

Will switching supplier reduce my Direct Debit straight away?

It can, because a cheaper tariff reduces your annual cost estimate. However, if you have outstanding debt with your current supplier, you may still need to repay it (and separate repayment arrangements may apply).

Does a smart meter help keep Direct Debits accurate?

Often yes, because it can reduce estimated billing. But you should still check that the supplier’s forecast matches your actual pattern, particularly after tariff changes or big household changes.

Is Direct Debit always the cheapest way to pay?

Not always, but it’s commonly priced competitively. The best option depends on the supplier and tariff. Comparing whole-of-market helps you see what’s available for your postcode and meter.

What details do I need to compare tariffs?

Your postcode and contact details are enough to begin. For best accuracy, have your latest bill handy (tariff name, usage, meter type, and whether you have electricity only or gas + electricity).

Need to act quickly? If your Direct Debit has just increased, start by checking your tariff end date and doing a comparison. Then talk to your supplier with the facts (balance, readings, annual forecast).

Trust & proof: why households use EnergyPlus.co.uk

Whole-of-market comparison

We help you review a wide range of UK home energy options so you can make a confident decision based on your postcode and circumstances.

Designed for real households

Guidance that focuses on common pain points: Direct Debit increases, credit balances, fixes ending, and making sense of usage.

Clear next steps

No jargon-heavy advice. Compare, check the numbers, and choose a tariff and payment plan that fit your home.

“My Direct Debit had jumped, but the bigger issue was the tariff. Comparing helped me understand the difference and move to a better deal.”

— UK homeowner (feedback summarised)

“I didn’t realise estimated readings were driving the increase. After updating readings and switching, the monthly amount finally made sense.”

— UK household (feedback summarised)

Testimonials are illustrative summaries of customer-reported experiences and are not guarantees of savings. Individual outcomes vary.

Ready to cut your monthly payments the right way?

If your Direct Debit feels too high, compare whole-of-market home energy tariffs and find a plan that matches your usage. Start with your postcode — it only takes a moment.

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EnergyPlus.co.uk is a comparison service for UK home energy. Always confirm tariff details with the supplier before switching.

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Updated on 14 Feb 2026