Pay up-front with Scottish Power

pattycake

I have had a letter from Scottish Power saying that if I pay a lump sum in advance, all my energy used will be charged at a 5% discount. It needs to be a minimum of their estimate of a year's usage.

I am fortunate enough to have capital and on the face of it, this seems like quite a good deal as interest rates are so low at the moment. There is no "small print" in the leaflet so I do not know if you are completely tied in for how ever long your money lasts or whether they will refund if you wish to switch to another supplier.

I would be interested to hear other opinions.

Vestra

Would you not get a better discount by paying by direct debit?

pattycake

I already pay by direct debit and have a dual fuel discount. The 5% discount is in addition to the existing discounts.

1carminestocky

What if they up their prices and you wish to leave during the period you have pre-paid for? Will you get back any 'overpayment'? I'm assuming so, but would you still qualify for the 5% discount for the period you have spent with them?

pattycake

Yes, that is what I am wondering. As I say, there is no small print in the leaflet they have sent me. They want me to ring to a "special adviser" who will give me details and a tailor-made quotation.

I am surprised that no-one else has received this mailing. I started the thread after searching to see if there was a discussion on the subject.

Premier_2

pattycake wrote: »

I already pay by direct debit and have a dual fuel discount. The 5% discount is in addition to the existing discounts.

If you pay a lump sum up front, why would you continue to pay monthly by DD?

If you don't pay monthly by DD, are you sure you'll still get the discount for paying that way?

pattycake

Perhaps I have not been clear as to what is being offered to me.

If I pay a lump sum upfront (at least equivalent to their estimate of one year's usage of gas and electricity), I will pay nothing else until the money has been used up. I will then receive a 5% discount over and above the discounts I have already been receiving for paying by DD and taking dual fuel and also by operating my account on-line and paper-free.

In other words, I will get my fuel 5% cheaper than if I continue in my current payment method.

Now, who thinks this is a good idea?

jd87

You might get tied into a 12 month contract with a high cancellation fee, or it might involve fixing your per unit rate at current rates. If either of those is involved I wouldn't go for it as energy prices are going to be dropping and you don't want to tie yourself into anything.

KimYeovil

pattycake wrote: »

I am surprised that no-one else has received this mailing. I started the thread after searching to see if there was a discussion on the subject.

That's because none of us here are with Scottish Power long enough to receive any retention incentive mailings. We hop in and out for cashback purposes. Three lots of 62 to 100 pounds each year is a lot more than 5%.

A_fiend_for_life

pattycake wrote: »

Perhaps I have not been clear as to what is being offered to me.

If I pay a lump sum upfront (at least equivalent to their estimate of one year's usage of gas and electricity), I will pay nothing else until the money has been used up. I will then receive a 5% discount over and above the discounts I have already been receiving for paying by DD and taking dual fuel and also by operating my account on-line and paper-free.

In other words, I will get my fuel 5% cheaper than if I continue in my current payment method.

Now, who thinks this is a good idea?

I'd ask for the terms and conditions first. If you decide to go for it chance a box of wine too. SP offered wine not to leave them.

Premier_2

pattycake wrote: »

Perhaps I have not been clear as to what is being offered to me.

If I pay a lump sum upfront (at least equivalent to their estimate of one year's usage of gas and electricity), I will pay nothing else until the money has been used up. I will then receive a 5% discount over and above the discounts I have already been receiving for paying by DD and taking dual fuel and also by operating my account on-line and paper-free.

In other words, I will get my fuel 5% cheaper than if I continue in my current payment method.

Now, who thinks this is a good idea?

You're correct - the prices are based on a 5% discount below their standard (variable) monthly Direct Debit tariff. Discounts for dual fuel & energy online are also available.

Full prices are available here:
http://www.scottishpower.co.uk/mediaAssets/doc/Pay-in%20Advance-March09.pdf

Terms & conditions are also explained at the end of that document.

There doesn't appear to be any exit penalties, but I suspect you'll only get back the actual value of any unused credit if you do switch supplier.
The deal otherwise lasts for as long as the advance payment lasts, which as you said is based on what they estimate to be equivilent to 1 year.


Alternatively, you could get 3% discount on a similar basis with their Discounted Energy July 2010 tariff, which obviously doesn't involve you lending them money.
However, there is an early exit fee of £30 for electric & £20 for gas - both waived if the cancellation is due to moving address.
http://www.scottishpower.co.uk/mediaassets/doc/Discounted-Energy-July%202010.pdf