Paying by DD- how much does it tend to save you?

~moneysavingnovice~

I've always paid my quarterly bills as they've come in, rather than paying by monthly DD (though I do put aside £100pm into a separate account so I'm prepared when the bill does come in).

I'm about to move home, so am debating whether to set up a DD in my new place. How much does it generally tend to save you?

From talking to family&friends, they say they're generally overcharged/in credit, as their DDs are set to high and they have problems getting the monthly amount reduced. Confused!

KimYeovil

It can be up to 25% and more cheaper.

You are expected to be in credit continually (reducing to zero as Mar/Apr approaches.) If your family and friends have the figures to support they are being 'over'-charged they will find it straightforward to have their instalments reduced. If there are difficulties then this is usually caused by consumers not wanting to pay in advance rather than occasional (but they certainly exist) obdurate computers and call-centre staff.

Marcusp

I was £120 in credit in April and Eon worked out that I would use £900 worth of gas and electricity in a year and set my direct debit to £75 per month so I asked them for the £120 and I got it 3 days later.

I also save over 25% by paying by DD than by paying on receipt of the bill, how much interest do you get on £900 a year? Not a lot compared to saving 25% by paying by DD.

In fact if Eon said to me pay £900 per year in advance and gave me 30% off instead of 25% for £75 per month I would do it.

Andy_WSM

Marcusp wrote: »

In fact if Eon said to me pay £900 per year in advance and gave me 30% off instead of 25% for £75 per month I would do it.

So would I, so long as the unit price was guaranteed for that year - i.e. they couldn't hike the prices up 5%

Marcusp

Well I am on fixonline8 and it is guaranteed for a year.

Any chance of it Eon?

Here's a payment of £855 per year instead of £75 per month for a 5% further discount.

brewerdave

Unfortunately your unit prices and discounts are guaranteed for the year BUT your rate of usage is not!
If they accepted the money up front and then we had an ultra cold winter or your personal circumstances changed (for example, long term sickness needing heating on all day,unemployment etc) they would effectively be giving you a much bigger "extra" discount!!

macman

All the cheapest tariffs require you to pay by monthly DD, so if you rule that out you are immediately paying far more than you need to. I've never had a problem setting my monthly DD with any utility supplier.
As Kim says, as long as you do your homework beforehand and know what your annual/average consumption is, you should not have any problems with DD.

Marcusp

If they accepted the money up front and then we had an ultra cold winter or your personal circumstances changed

then I presume Eon would do what they do with DDs, next year it would cost £1000 or a monthly DD of £100, I can't be bothered working out the exact amount.

The DD does not relate to the exact cost of the gas and electricity used, it is only an approximation of what Eon think it will cost for your usage divided by 12.

So if you use more the DD goes up next year.

DVardysShadow

~moneysavingnovice~ wrote: »

I'm about to move home, so am debating whether to set up a DD in my new place. How much does it generally tend to save you?

In money it saves you a little. But it is a pittance compared to the grief when they start seeing their DD customers as cash cows to solve their cash flow issues

Former_E.ON_Company_Representative:_Malc

Marcusp wrote: »

Well I am on fixonline8 and it is guaranteed for a year.

Any chance of it Eon?

Here's a payment of £855 per year instead of £75 per month for a 5% further discount.

Hi Marcus

Sorry, but only just spotted your question.

Not aware of any such scheme in the near future. Will gladly feed your idea back, though.

Malc

Former_E.ON_Company_Representative:_Malc

Marcusp wrote: »

then I presume Eon would do what they do with DDs, next year it would cost £1000 or a monthly DD of £100, I can't be bothered working out the exact amount.

The DD does not relate to the exact cost of the gas and electricity used, it is only an approximation of what Eon think it will cost for your usage divided by 12.

So if you use more the DD goes up next year.

Not sure of your circumstances Marcus, but we do offer a tariff with fixed monthly payments for a 12 month period. It is our Staywarm product and is for people aged 60 and over who meet certain criteria.

On this tariff, as much energy can be used for the same fixed monthly amount throughout the term of the contract. This is not to say usage is unimportant, as it will form the basis of subsequent renewal offers.

However, it is more about peace of mind with no unexpected bills than cost saving and I doubt it will be cheaper than Fixonline 8.

Not sure if other suppliers offer a similar product.

Give me a shout if you need any more info as will be happy to help.

Malc