Should i ask for my credit back?

Nara

Hi all,

Been paying £86 a month for gas and electric with scottish power, have just receieved my annual usage information.

It estimates how much i will use next year which is the same as this year:o

So the £86 a month adds up to this cost.
But my account is in credit by £245, when i rang to ask for it back they said i should really leave it as it will cover the higher usage/costs in winter, but i don't get it. If they have just told me how much i used last year including last winter and it adds up to how much i am paying by direct debit then surely i shouldn't need the credit unless i end up useing alot more this winter then last winter? ( last winter it snowed for ages here in jan/feb and even a few times in march!)

I have looked on you switch and i could get it £100 a year cheaper else where, which isn't a 'great' saving so I'm not sure if i will bother with the hassle of switching atm, but the ''credit'' money would be helpful towards Xmas, or should i wait until the winter is over and see if there is any left?

She said if i end up useing more then is estimated this year then my direct debit will go up, which i don't want as its always hard to get back down again!:eek:

Any advice/?

davidgmmafan

Generally speaking it is a pretty terrible idea to get a refund at this time of year as the next few months are when the majority of gas is used. If you have the bill for that period last year then you can check the figures yourself, last year was a bad one, so if you have enough to cover the same with your payment alone I can't see a problem.

However if the credit is needed then you have to ask yourself how, having spent the money on Christmas how would you cope with a higher monthly payment or paying a one off payment to cover the debit?

Its possible the credit can be refunded and do no harm but it depends on your circumstances. Is the bill to an actual reading?

Scottish_Power

Hi Nara

This is a common question at this time of year, especially now coming so close to the festive period. I am sure we would all agree that an extra few pounds in our pockets at this time would help, however I would not recommend refunding the credit balance on your account as this credit is there to be put towards your higher winter consumption. By having this credit balance on your account now, this will ensure that your monthly payment can remain consistent throughout the year. Refunding this credit will result in your monthly payment being reviewed and increased.

If you want to review your account to see whether credit can be returned to you or whether your payments can be altered, I always recommend checking the account around March / April time. The reason for this is that you will have gone through the coldest months of the year and so the credit that was previously on your account should now have balanced out. If there is still credit on your account at this time then there would be no issue at all in having this returned to you and then your payments reviewed to cover you for the next 12-months. Having the payments reviewed in April then allows you time to build up a credit again in preparation for the winter months which should again balance out by April of the year after.

I hope this information helps. Please let me know if you have any further questions.

Kind Regards

Colin @ ScottishPower

Hooloovoo

scottishpower_company_representative wrote: »

I would not recommend refunding the credit balance on your account as this credit is there to be put towards your higher winter consumption.

Not necessarily.

Nara is saying that the current direct debit of £86 per month will exactly pay for twelve months usage assuming that the usage stays the same as last year.

So if they are £245 in credit now, they will still be £245 in credit in twelve months time. They could have the credit refunded so that their balance is zero, and then in twelve months time their balance should still be back at zero.

I'm in exactly the same situation. My annual usage is fully covered by a payment of £63 per month. But I am £192 in credit. My direct debit has just been reduced to £47 per month. This means that I am underpaying for my usage by £16 per month, a total of £192 underpayment making my balance zero by this time next year. In twelve months time I will have to ensure my direct debit is recalculated back up to £63 per month to ensure no further underpayment.

The OP should either get their overpayment refunded, or have their direct debit recalculated for it to be gradually refunded over the course of the next year, and the payments then increased back to normal level.

JimmyTheWig

Maybe this time last year they were £490 in credit?

Hooloovoo

JimmyTheWig wrote: »

Maybe this time last year they were £490 in credit?

Maybe. But ...

So the £86 a month adds up to this cost.

Unless they have worked out their annual bill incorrectly, they do state that their current monthly direct debit will cover the annual bill.

t0rt0ise

It used to be that the monthly amount was worked out to cover the year which meant that some months you'd be in credit and others in debit but it all worked out in the end. Nowadays the suppliers don't like there being any debit months so there has to be a buffer there all the time which is in effect us lending the supplier money. But that's the way many of them like to play it now and we have to play along.

Hooloovoo

t0rt0ise wrote: »

It used to be that the monthly amount was worked out to cover the year which meant that some months you'd be in credit and others in debit but it all worked out in the end. Nowadays the suppliers don't like there being any debit months so there has to be a buffer there all the time which is in effect us lending the supplier money. But that's the way many of them like to play it now and we have to play along.

Well Scottish Power at least have set my direct debit to a level which will make my balance exactly zero by this time next year assuming my usage stays the same. Other suppliers my of course do things differently.

Swipe

Hooloovoo wrote: »

Well Scottish Power at least have set my direct debit to a level which will make my balance exactly zero by this time next year assuming my usage stays the same. Other suppliers my of course do things differently.

Same here. I actually opted to raise my monthly DD a little to give me a small buffer just in case I use more than last year.

Scottish_Power

Hi Hooloovoo

I understand what you are saying and this is correct. It should balance out again over an exact 12 month period from now if the OP is using £86.00 per month. Our billing system does not encourage customers to go into arrears of £245 and so tries to build a credit for the customer to be used for the winter months, so that the break even point is after the winter months, not before.

I've used this example before, but you may have missed it. If your monthly Direct Debit payments were to work on your method, i.e. the account goes into arrears over winter and then balances out come summer. What would happen if a supplier offered a great new deal around Dec/Jan time and you wanted to switch straight away? If you had £245 outstanding on your account you would not be able to change supplier until this balance was paid. On the other hand, if your account was allowed to create a credit balance in the lead up to winter, then there would be no issue in transferring.

Like Swipe has mentioned, there are customer's who also like to have a security nest just incase we have a winter like we did last year.

Let me know if you have any further questions.


Kind Regards

Colin @ ScottishPower

JimmyTheWig

scottishpower_company_representative wrote: »

What would happen if a supplier offered a great new deal around Dec/Jan time and you wanted to switch straight away?

How very noble - setting up your whole system to facilitate the switch to a competitor.

Worth noting, however, that this process also gives you £100-odd interest free per customer.

Out of interest, then, is this something that you enforce? Or would you allow a customer to do it differently? It would seem fair to me to split the difference. So that the "zero" point was around the middle of January. Would you allow a customer to opt for this arrangement, on the understanding that they kept money aside to pay off the balance if they wanted to switch in February / March?

[No pun intended on the word "interest" above!]