Monthly DD payments up 160%

Trix · 11 May 2006 at 12:27PM

My latest bill came the other day and said my new balance was £268.61. I didn't take too much notice as I'm usually in credit during the winter from lower summer usage and 'owe' in the summer because of higher winter usage, but my DD amount doesn't usually alter because it all balances out. Considering we have double glazing, cavity wall insulation, loft and door insulation and a condensing boiler it isn't like we have the heating on loads or very high.

This morning I got a letter saying my DD payments are going up from £54 a month (dual fuel) to £140 a month...!!!!!!!!!!:eek: Is this a typical price increase?

The letter says it will be £140 until the £268.61 is paid off and then they will review the payments again, but doesn't say what length of time they have put the £268 over so what it would be if I wasn't paying that.

I change supplier pretty much every year using the recommended comparison sites, and knowing that all the prices were going up anyway, I was waiting for my new bill so I could put in up to date figures for a more accurate comparison when looking at switching.

For some strange reason my bill says that my gas reading on the 3rd of May was an estimated meter reading and my electricity on the same date was an actual reading. It was a guy that came out to read them both together so why is one actual and the other estimated?

Anyway - it's a huge amount to suddenly start paying, so where do I start?

1. If I switch now, what price do I put in for 'payment per month' on the comparison sites?

2. Will I be able to switch now and pay my new suppliers the outstanding amount? (I'm sure I did this once before - the new suppliers paid off the old suppliers and then I paid the balance to the new suppliers over time IYSWIM)

3. Is there some kind of financial help I can get to pay off the £268 straight away? (we have CTC & WTC, daughter has higher rate for both components of DLA, OH has carers allowance)

In the absence of the thanks button - thanks in advance to everyone who can advise :beer:

espresso · 11 May 2006 at 1:17PM

If the above figures are based on an estimated reading, they are effectively meaningless.

Supply your own readings and you should then receive corrected statements which are based on fact.

Then calculate for yourself how much you actually need to pay remembering to include any current debt.

The only way to get accurate figures from comparison sites, is to enter your actual annual kWh figures and forget the "payment per month" option.

Wig · 11 May 2006 at 1:39PM

Use your old bills to work out your annual consumption, using all the actuals or customer supplied readings, I did this over 5 years and worked out how much I used in each year.

My annual consumption is 20,000 kwh gas 1,800 elec
infact over the next year my actual use was
21,000 gas, 1,234 elec I must have been colder this winter, and was surprised for the leccy to be so low.

Working it out according to how much you pay is not going to be accurate enough (and open to more errors) IMHO. If you do it according to actual usage there are going to be less errors.

If you know your annual usage as I do, you will know what level to set your DD, this was my first year paying by DD, I set my gas @ 24 month and elec @ 16, the gas worked out pretty good, I was building up a healthy balance over summer which paid for my winter usage. The leccy built up a credit balance of 50 quid, so I stopped the DD for 4 months and now it is set @ 10 pounds.

If you are sure you are on the right DD amount, so that the low summer usage will balance everything out, then you should argue with them that the DD is supposed to be an average of annual use, and if they do it this way then the payments will have to be seriously cut back in summer and then increased in winter, which all defeats the purpose of an average figure for the DD.

My gas use in the 6 warm months must be about 3,000 and the 6 cold months about 18,000 one hell of a difference! Depending on if you start with a supplier in the summer or winter, though you will either build up a debt or a credit balance, I suspect they like it if it is a credit balance and don't like it so much if it is a debt balance, but at the end of the day it has to be one or the other, that is the nature of energy usage, and it is rediculous if they cannot see that the debt will be slowly consumed by your DD over the summer period.

So if you do go back and total up your gas & elec usage for the last few years you will be able to tell them on the phone what your annual consumption is going to be, so leave the DD alone and let things work themselves out.

Qu2. Don't know, I wouldn't have thought there are many companies willing to take on a debt.

Qu 3. Don't know, you shouldn't have to pay it at all if you're sure your DD figure is accurate for the whole year. Tell them your figures, tell them you are budgeting for x amount per month DD for the whole year, and they should be able to calculate that this will suffice for an annual useage of xxxxx kwh per year.

black-saturn · 11 May 2006 at 2:07PM

Mine has gone up too and they always get a proper reading out of me.

smartie1976 · 11 May 2006 at 2:44PM

Take a current read and see how different it is.
Ring them up and ask for a replacement bill from your read.

Trix · 11 May 2006 at 3:59PM

I emailed them asking:

1. Why was one reading an estimate when they were both read on the same day?
2. How long is the £268.41 being paid over?
3. How much would my monthly payment be if I paid the balance off straightaway?
4. What percentage have the charges gone up?
5. Has my amount of fuel usage gone up dramatically?

This is the reply I got:

I am sorry that an estimated read as used when an actual read was available. I have recalculated our account using the actual read and this reducd your balance by £78.

Based on this a Direct Debit of £120 per month will pay for energy and reduce the balance over the next 6 months.

If you pay the balance shown on the amended statement I have produced your Direct Debit can be set at £80.

As a result of the recent price increase your energy costs have increased by around 25percent.

I have checked your acccount and can see that the amount of energy you use has not changed.

To be fair they answered every question and in just under three hours after I sent the email - although their typing skills could be improved (all the typos are theirs - I copied and pasted!)
So the problem is, their prices have gone up 25%:eek: Time to switch!

matto · 11 May 2006 at 4:05PM

It would make sense for companies to increase DDs along with increases in prices but this is probably not in their interests.

Firstly it would make people more aware of the increase and possibly more likely to switch.

Secondly as the amount owed to the company increases it makes it more difficult to switch.

Monthly DD payments up 160%

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