Help - just had bill through...

As I said earlier, if someone can tell me the sort of rete they are charged on their authorised o/d, I'll come up with some figures so we can see what sort of figures come up from having a DD or paying for energy the way Debt Free Chick espuses.

With regard to the assertion by Debt-Free-Chick, I have made some calculations to see which-monthly direct debit or saving for the bills on an interest bearing account- would be of most benefit to me. For the purpose of the exercise, I took the amount of gas energy consumed in the year this May and applied current prices to it. The notional bills produced in order of receipt would have been
£34.60
£101.33
£225.84
£144.20

Total £505.97


The above are those that a quarterly payer would receive. I receive a 6% discount for paying by monthly direct debit. Such a payer’s bills would be £475.61.

Next I sought a mainstream instant access account that paid monthly interest at the high end of rates for that type of account. I chose Ing whose headline rate for monthly interest is 4.41% (AER 4.45%), tax deductible @ 20%. I then looked at a situation in which I had such a savings account in existence from which the gas bills would be paid and calculated a notional opening balance that together with interest receivable would avoid any deficits and produce a small credit balance at the year-end. In all cases the monthly direct debit payer would be better off by nearly £23 at the year-end. This benefit applied no mater what initial balance was chosen. Even if the highest bill was first and the bills were in order 2,3,1,2, the benefit was not much different at a little more than £27.

I readily admit that the calculations are based on my consumption and tariff and so the results for others may be different. However any assertion that all monthly schemes are a rip off, however that assertion is worded, is false. Moreover, I have never had any trouble in agreeing a monthly figure of my choice with any of the several companies I have dealt with since privatisation

BexTech wrote:

I don't think the monthly DD scheme is awful at all, makes life so much easier, but then my DDs have always been set about right, no matter which company I've used.

The only time problems could arise is when you are too clueless to work out what you should be paying and average out over the year.

I second that with amendments. In oder not to give anyone personall ofence I would prefer impersonal *one is* and *one* to replace the coloured text.

Just phone them up with current meter readings so that their system more closely matches your true usage.

I don't deny that the difference is "marginal" and if I gave anyone the impression that it would be "significant", then I sincerely apologise.

However, as the benefit is only likely to be marginal, then one has to weigh up several things ...

Where there is actually a cost to foregoing the monthly DD option

The lack of control over your own money if you opt for a monthly DD

The "convenience" of DD (although, a standing order each month to a savings account could achieve the same effect).

There is one worrying trend, however, which I have seen on other boards. That the power companies seem to want to increase current DDs because of recent price hikes. One poster on TMF has had her Powergen DD doubled. This is when I get very sceptical. PG claimed they did not want the customer to get into debt, but they were happy to double her power costs with a simple letter telling her this and no opportunity to budget for it, in advance. And this was someone on a strict budget struggling to pay other debts. If you're on a DMP with debt management company, you are likely to have to submit a new budget and possibly renegotiate your debt repayments, unless you have some contingency.

However, that's a secondary point to those not dealing with debt. The main one being that if you are going to pay by DD then for heaven's sake make sure the monthly payment is realistic. If you still have a hefty credit (more than one months payment) after 12 months, then your monthly DD is too high and you may have trouble reducing it. Some of the power companies are very difficult to persuade if you want to reduce your monthly payment. I wonder why that is? :rolleyes:

I don't need to be nannied by a power company, thank you But it buys you peace of mind and convenience, then it may well be the best option for some. Just be aware of the "price" you pay - other than money - and make all decisions with your eyes wide open.

Cheers