Is it me or does monthly DD seem to work differently??

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claireac
claireac Posts: 983 Forumite
I've seen this commented on a couple of times recently and I happen to agree.

In the good old days (maybe 6-8 years ago) I used to get my gas from BG and for a 3 bed end of terrace (2 adults, 2 kids) used to pay the staggering sum of £12 a month (oh for those days again). I used to get in credit during th summer when the heating was off and in debit during the winter. The thing is, my dd was never increased, it just went back into credit during the warmer months!

It just doesn't seem to work like that any more. We were paying £70 and month, and since we entered our reading online (Scottish Power) our dd has shot up to £130 due to a £230 debit. It was £150 but we argued it. So what happens in 3 months time?? Will they reduce it again?? I wait with baited breath ;).

What do you think??
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  • Cardew
    Cardew Posts: 29,042 Forumite
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    Well as you asked what we think.

    I am of the opinion that there is far too much angst about the size of DD payments.

    Obviously the problem initially is that the companies use far too many estimated meter readings - certainly initially - and not raising DDs when they increase their energy prices.

    However this is compounded by customers who seem to take no interest in checking their bills and comparing actual meter readings with those on the bill. With many couples working all day it is difficult for the companies to obtain meter readings if the meters are inaccessible.

    Reading this forum over the past couple of years, there are scores of posts from people who have been paying the same DD amount for years and seem totally amazed that they find themselves with a large debit balance.

    The normal reaction is that it is the fault of the company and/or they could not possibly have used that much electricity as they turn everything off standby.;)

    Well it seems that all companies have a new policy to recover any debit quickly and have DDs set to a realistic amount. I wonder if Ofgem have sent out a policy directive??

    Now all we seem to get is complaint after complaint that Company X has doubled my DD.

    Personally I have seen very few posts on here, where all the facts are given, where the increase in DD is not justified.

    Several Utility company employees have explained the DD system. However the Utility Companies are so demonised that rational explanations are just not accepted.
  • JJ7
    JJ7 Posts: 544 Forumite
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    I'm with Scottish Power too and I've noticed the same thing. They seem to be working the dd payments out quarterly instead of annually.

    I've been trying and trying to get through to them on the phone to alter my payments, in the end I set up an online account with them only to find out that I couldn't alter dd payments online after all and had to either ring or email them.
  • claireac
    claireac Posts: 983 Forumite
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    Thank you for replying, I found it very interesting. Particularly as it's only recently that I have become more interested in this. Yes I know that's probably wrong - but it's honest!

    In our situation, we moved into our house in June 2008 so we had nothing to compare like for like even taking into account all the rate increased. At our previous property we were on a prepayment meter - so again, it's different!! I did find it amazing when our combined bill for the last quarter was over £400!! Maybe because our initial dd was low (£70), and you don't notice it so much on prepayment meters.

    I did post and ask if I was heating and lighting the street - hoping anyway :rotfl: !!

    I think in general people are more aware of their money, and even more so in the "current economic climate". I love that phrase!
  • claireac
    claireac Posts: 983 Forumite
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    JJ7 wrote: »
    I'm with Scottish Power too and I've noticed the same thing. They seem to be working the dd payments out quarterly instead of annually.

    I've been trying and trying to get through to them on the phone to alter my payments, in the end I set up an online account with them only to find out that I couldn't alter dd payments online after all and had to either ring or email them.

    Perseverance is the key!! My partner spends a long time on hold, and we also have the online account.
  • E.ON_Company_Representative
    E.ON_Company_Representative Posts: 806 Organisation Representative
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    Hi

    In its finest form Direct Debit is a years worth of energy charges divided over 12 equal payment amounts.

    The problem with this is your supplier has to predict what you’re going to use, this is never going to be completely accurate (consumption is ever changing as are unit prices).

    Many suppliers will review a customers Direct Debit on the production of each bill, as this means they have a new and more up to date idea of your consumption.

    At the moment many suppliers are reviewing the Direct Debit with the intention of you having a zero balance in the spring (April/May).

    This means many people have seen an increase in their Direct Debit during the later half of last year to ensure they pay enough to cover the winter.

    Hopefully in the spring if it’s reviewed (in this way) the supplier will have an idea of a full year’s usage and re-adjust the amount so it’s perfect for next year based on the full previous year. This may mean a reduction to the amount you pay each month.

    If the amount you were paying earlier in the year didn’t build up enough credit to cover this winter, this is possibly why you have just had an increase.

    Remember that if there are any arrears these are included in the amount of your Direct Debit.
    Official Company Representative
    I am an official company representative of E.ON. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • claireac
    claireac Posts: 983 Forumite
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    Hi

    In its finest form Direct Debit is a years worth of energy charges divided over 12 equal payment amounts.

    The problem with this is your supplier has to predict what you’re going to use, this is never going to be completely accurate (consumption is ever changing as are unit prices).

    Many suppliers will review a customers Direct Debit on the production of each bill, as this means they have a new and more up to date idea of your consumption.

    At the moment many suppliers are reviewing the Direct Debit with the intention of you having a zero balance in the spring (April/May).

    This means many people have seen an increase in their Direct Debit during the later half of last year to ensure they pay enough to cover the winter.

    Hopefully in the spring if it’s reviewed (in this way) the supplier will have an idea of a full year’s usage and re-adjust the amount so it’s perfect for next year based on the full previous year. This may mean a reduction to the amount you pay each month.

    If the amount you were paying earlier in the year didn’t build up enough credit to cover this winter, this is possibly why you have just had an increase.

    Remember that if there are any arrears these are included in the amount of your Direct Debit.

    That's fine, but if the arrears are paid off by end of next quarter and the dd comes down, does it still only take into account and is based on the amount used in the previous quarter or does it look at the account as whole for an average? Do you see what I mean? Not sure I'm explaining it very well!
  • molley
    molley Posts: 528 Forumite
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    I just got a phone call from Scottish Power trying to get me to do a like for like comparison with them to see if they would be cheaper than my present supplier who is EDF . I couldn't be arsed spending time on the phone to do it but what she seemed to be suggesting was that if I changed to them then I'd give them online readings monthly and the DD would be based each month on that reading . Anyone know about this .It does seem a sensible idea .Do any other companies do this ?

    Also as I said to her comparing suppliers is a pain .what you need to be able to do is enter a reading from your curent supplier and the comparison sites would tell you EXACTLY what other suppliers would charge based on that reading but that seems too difficult for them to do unless someone knows different.
  • E.ON_Company_Representative
    E.ON_Company_Representative Posts: 806 Organisation Representative
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    Again it probably depends from supplier to supplier, but I would think that most suppliers look at a full year’s usage and not just the last quarter.

    Ask your supplier how they do it next time you speak to them for a definite answer, I would hope they're interested in helping people understand how it works.
    Official Company Representative
    I am an official company representative of E.ON. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • claireac
    claireac Posts: 983 Forumite
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    Again it probably depends from supplier to supplier, but I would think that most suppliers look at a full year’s usage and not just the last quarter.

    Ask your supplier how they do it next time you speak to them for a definite answer, I would hope they're interested in helping people understand how it works.

    Thanks Brian, you've been really helpful.

    I will def ask them next time, I'm interested to know. Especially now the payments so high :rolleyes: !
  • molley
    molley Posts: 528 Forumite
    First Anniversary Combo Breaker First Post
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    Again it probably depends from supplier to supplier, but I would think that most suppliers look at a full year’s usage and not just the last quarter.

    Ask your supplier how they do it next time you speak to them for a definite answer, I would hope they're interested in helping people understand how it works.

    Deleted ......
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