Your method of paying energy bills? Direct Debit?

Rich_T_2

Hi all,

Was just wondering which method you lot use to pay your energy bills?

At the moment I pay either the gas or electric bill when it comes in every quarter and another family member pays the other. This has the benefit of my phoning up when the bills come in and giving an actual reading so we then only pay for the energy we use.

Problem is I think we could be saving around 6% by going direct debit? (we are with EDF gas+fuel). So my question is for the people who pay DD is when do you give your meter readings? I don't want to be in a position where we are getting charged estimates month on month (as this is what happened before and we got a really big bill months down the line).

Cheers guys,

Richard

Dreamnine

I know that I give them online readings exactly every 90 days...this seems to work for Scottish Hydro and they always bill me correctly every quarter.

I haven't bothered switching to DD yet - I hardly use much gas and electricity.

KimYeovil

Typical savings are often much higher than 6%.

You have a meter in your home - there is no need for any unexpected variance in the bills. If you are happier paying 6 to 20% more for quarterly billing then feel free to continue to do so.

davidgmmafan

I pay by direct debit, if anything I am overpaying because I am wary of the way they reassess sometimes. I'd rather be in credit in case something unexpected happens.

If you give frequent meter readings and keep an eye on your bills there's no reason for the DD to change much either way if its set correctly. If you are considering DD look at switching to an online tariff as they are typically £2-£300 cheaper per annum for the average user.

Also when I was with EDF I believe they gave me nectar points for submitting meter readings online so check if they still do this.

brewerdave

The only issue with DD payments (assuming you trust your bank & utility supplier to use them correctly!!) is that the utility supplier will try to set the DD at a level to ensure a zero balance around April. This means that you will build up a credit balance with them during the Summer months to pay for Winter - whilst interest rates are low this perhaps is unimportant but it would be a nice little earner if the rates returned to 7 or 8%.
I try to avoid this by switching in the Summer and manually setting my initial DD with the new supplier @ 1/12 of my expected annual usage.The utility suppliers may or may not adjust the DD over the first Winter period - hopefully not !!

davidgmmafan

I take your point, but I don't believe all suppliers do it this way. Also the discounts for direct debit ARE usually fairly meaty, combined with the cheaper (online) tariffs I doubt you could get a better return on the same cash even when savings rates were good. Particularly if you compare like for like. You are drip feeding the savings account, how much monthly would you need to get say £50 or £100 interest?

brewerdave

davidgmmafan, I'm not suggesting that DD online plans are not the best .......but this is a Moneysaving site and I believe in maximising the time the money stays in my account rather than theirs!:rotfl:

dizziblonde

We pay by monthly direct debit, know full-well how the payments are calculated since hubby works for the company and has done work on that part of the computer process himself anyway... and if anything goes wrong he'd get the blame and a flea in his ear from me!

Just easier to not have to worry about it - even if it's not as financially awesome.

davidgmmafan

brewerdave wrote: »

davidgmmafan, I'm not suggesting that DD online plans are not the best .......but this is a Moneysaving site and I believe in maximising the time the money stays in my account rather than theirs!:rotfl:

The thing is though its not even close, £200-£300 saving for onlein deal for average usage with any supplier, plus £100 DD discount. By all means keep the money in your account. Best instant access account I can find is Lloyds current account with Vantage paying 4% gross.

The average bill is what £1000-£1200 so you'd get £40-£48 MAX for having the funds in your account all year. With my supplier, NPower, you'd be missing out on £100 Dual Fuel DD discount and the saving I've already mentioned on the tariff. Potentially ten times more than the interest. Its not suitable for everyone as you need interenet access of some kind and DD, but if money saving is the game then its the best way to go.

Cardew

davidgmmafan wrote: »

The thing is though its not even close,

Spot on!

I find it remarkable on a money saving website how people have a fixation about how much interest they lose when paying by DD.

The average annual bill in UK is around £1,200 - so £100 a month if you pay by DD.

By paying on receipt of a quarterly bill, you will have an average bank balance throughout the year £150 higher than if you paid by DD.

Even assuming that you could get 3% on your bank account(2,4% after tax) you are gaining well under a fiver a year rather than paying by DD. - not to mention the time, and sometimes postage cost, to pay your bill.

Compare that fiver with the large discounts for payment by DD and it is a no contest in money saving terms.

brewerdave

Cardew et al - To make it clear....I pay by DD and handle my account online because I appreciate that it gives me the best deals.
The point I was trying to make is that I "manage" my monthly payments as far as is possible to minimise the credit balance that the Utility supplier holds at any one time.
I fully realise that the savings far outweigh the loss of interest BUT for cash flow purposes it suits me to have a credit balance in my account rather than theirs!!!