Paying for what you use

kingmint

I want to switch our gas and electricity to a more suitable plan for our house. It's a shared house and we want to be able to pay for the gas and electricity we use on a regular basis to avoid complications if and when different housemates move out/in. We are currently on monthly direct debit which has caused problems as my housemates are paying for the excess due to underestimated bills, while previous housemates who are part responsible for the excess have already moved out.

I know that regular meter readings can help but this is not a perfect solution as energy companies will still under- or overestimate, and our different patterns of energy use in each season will still mean our bills do not reflect our usage as much as we would like.

One option is switching to first utility who install a smart meter but I am not happy about their £100 termination fee, given ours is a shared house and we may need to terminate sooner.

Are there any other companies out there offering payment plans that will bill us according to our actual use as long as we provide regular meter readings?

KimYeovil

Every supplier will do this with quarterly payments.

If you don't want the extra expense, you need someone reliable to manage the parallel accurate payments. If there is no-one trustworthy, move.

kingmint

Does anyone do this with monthly payments?

Magentasue

Even if you move to quarterly bills, you could still end up with estimates. I've recently used Scottish Power and managed the account online. Every month, I'd put in meter readings and a bill would be generated. Now, other suppliers may also do this. I've just switched to EDF and their website suggests they will work in a similar way.

I wonder if you could set up a monthly Standing Order to pay a sensible monthly amount. The advantage of Standing Orders over DDs, is that you can amend either a single payment or a series. You could arrange a standing order for, say the 1st, submit your reading on the 21st of every month, look at the bill next day and amend the standing order accordingly. You need to check tariffs, or ring around and see which suppliers give best discounts for standing orders and then look at the comparison sites to see which would be cheapest.

I'm not sure this would be a perfect solution, but it would mean you were paying for what you use. Disadvantage would be that there would be some very expensive months in the winter, whereas with monthly DD, your payments are predictable.

KimYeovil

kingmint wrote: »

Does anyone do this with monthly payments?

If you have quarterly billing you can pay them monthly (or whenever you like) - that's why suppliers charge more. You can also budget for winter.

If you receive an estimated with quarterly bills just contact them with correct reading and a new one will be posted out.

roy_harper

Dear Experts,
I'm on income support with long term disability - with no savings.
I've run up electricity and gas combined debt of £500 since January this year.
I phoned them and they were very patient - and explained I could repay it if they came and installed a gas and electricity meter which they would set so that it recovered £10 a week to repay the debt, and I have to give a lump sum just now, though they didn't say how much.
The alternative of paying 1/4 of the debt and £125 per month is too expensive.

The only other thing I thought of was a Budgeting loan for £300 - but not guaranteed I will get this.
Should I go ahead with the meter installation - it seems too good to be true.

Thanks in advance for your advice

Magentasue

The problem with prepayment meters is that, usually, you pay more per kwh. The other problem for low income households is that you pay in advance for the energy you use, so in the summer you need to put money aside so that you will have enough to feed your meters when the heating is on.

I don't know much about benefits - is the £300 interest free? If so, it might be worth asking SP to put your account on hold while you apply for this. You do need to be making regular payments in the interim so that you don't build up further debt.

Perelandra

Just a few more thoughts- these aren't thorough, so other options might exist.

If you want monthly billing, I don't think any of the suppliers that use a tiering system would be suitable, since the "Tier 1" usage is based on a quarter's consumption (so it wouldn't be possible to work out the month's bill until the end of the quarter). If you go to flat-rate suppliers, you can get a monthly bill (I currently get a monthly bill from Utility Warehouse).

Quarterly Variable Direct Debit is also a payment option, in which you only pay for the amount billed each quarter (so similar to cash/cheque, but the payment is automatic). Not the same thing as Monthly Direct Debit.

Old-fashioned solution- when I shared a house, we had a cashbox; every month we calculated the cost of the power used from our own meter readings, and saved the money in the box until the quarterly bill came... it wasn't too bad!

KimYeovil

Perelandra wrote: »

If you want monthly billing, I don't think any of the suppliers that use a tiering system would be suitable, since the "Tier 1" usage is based on a quarter's consumption (so it wouldn't be possible to work out the month's bill until the end of the quarter). If you go to flat-rate suppliers, you can get a monthly bill

Not true. It is as easy to calculate a two tier tariff monthly or weekly as it is quarterly.

Perelandra

KimYeovil wrote: »

Not true. It is as easy to calculate a two tier tariff monthly or weekly as it is quarterly.

The consumption is normally for the first "x" units per quarter though, isn't it? If there are tariffs that have a monthly Tier 1/Tier 2 split, then I'd agree completely with you.

If it's a quarterly split though:

If your first 250 units per quarter are charged at the Tier 1 rate, but your actual usage is 120 units in Month 1, 80 in month 2 and 90 in month 3, at the time that a Month 1 bill is produced I'm not sure how Month 1's bill could be calculated separately from Month 2 and 3? (Would all of Month 1 be at the Tier 1 rate?).

Magentasue

Perelandra wrote: »

If your first 250 units per quarter are charged at the Tier 1 rate, but your actual usage is 120 units in Month 1, 80 in month 2 and 90 in month 3, at the time that a Month 1 bill is produced I'm not sure how Month 1's bill could be calculated separately from Month 2 and 3? (Would all of Month 1 be at the Tier 1 rate?).

Couldn't you just do 250/3 = 84 kwh at tier 1 price every month? You could work out more accurately but that would do I think.

The worst that could happen is that you don't use all tier 1 units and save up too much.