Monthly Direct Debit advise?

bery_451

Hi,

According to the owner of this website he claims that paying by Monthly direct debit is cheaper by 6%.

However if they overcharge you they will refund at the end of the year. Do you have to manually request this refund or is it done automatically?

Are Quarterly Direct Debits based on estimate usage like monthly direct debit?

Are monthly direct debits are hassle and is the hassle worth for that 6% saving?

macman

Yes, a typical DD discount is 6%. That's what I get with EDF.
DD's are based on whatever data you supply-if you supply regular readings, they will be more accurate.
What 'hassle' is there in a DD monthly or quarterly? It's set up online once and that's it. I save maybe £90 a year, so definitely worth it.
Most (though not all) of the cheapest online discount tariffs require monthly DD payment. Rule out DD and you lose access to those tariffs.

bery_451

macman wrote: »

Yes, a typical DD discount is 6%. That's what I get with EDF.
DD's are based on whatever data you supply-if you supply regular readings, they will be more accurate.
What 'hassle' is there in a DD monthly or quarterly? It's set up online once and that's it. I save maybe £90 a year, so definitely worth it.
Most (though not all) of the cheapest online discount tariffs require monthly DD payment. Rule out DD and you lose access to those tariffs.

So with monthly direct debits I have to submit monthly meter readings online for a accurate charge? Otherwise I might be overcharged with their estimate.

What about Quarterly direct debits? Are they the same as paying manually upon receiving your bill quarterly except the money is direct debited out of your account?

NowRetired

So with monthly direct debits I have to submit monthly meter readings online for a accurate charge?

not exactly, they estimate your yearly usage using the previous years usage if available, calculate what it would cost, say £1200.


They divide that by 12 and set your DD at £100 a month.


That is putting it in simple terms.

Bluebirdman_of_Alcathays

bery_451 wrote: »

Hi,

According to the owner of this website he claims that paying by Monthly direct debit is cheaper by 6%.

However if they overcharge you they will refund at the end of the year. Do you have to manually request this refund or is it done automatically?

Are Quarterly Direct Debits based on estimate usage like monthly direct debit?

Are monthly direct debits are hassle and is the hassle worth for that 6% saving?

Overcharging is an emotive word. DD's are always going to be an (un)educated guess of what you use, if you end up paying for more than you've used, you can request it back.

The saving you are getting for letting them hold your money during the summer is far better than you'd get from any bank - and don't forget that through the winter you actually owe them money.

I personally can't see what the hassle is - do you have no regular DD's leaving your account whatsoever? Most people have Council Tax, Car Insurance, Mobile phone and Television to name but a few.

matelodave

If you want the charge to reflect your consumption then someone has to read the meter and give the info to the supplier. If you want it done accurately then do it once a month and give the info to the supplier, if you don't then wait for a random meter reading and lots of intermediate estimates.

The whole idea of monthly direct debit is that you give them an accurate estimate of what your annual consumption will be (based on last year or several years), get a price for it and then divide it by 12. In the summer you'll be in credit and in the winter you'll owe them some but if you do it properly then it should balance out. However some suppliers review it either quarterly or six monthly , throw a wobbly if you are over or under and change it so it goes up & down like a yo-yo (ours for instance has been £85, £119, £82 and is now £55 - it should have been £79 for every month and we then wouldn't be £100 in credit)

The idea with a quarterly dd is that they send you a bill, you check it pronto and let them know if it's correct or not and they just take the money from your account - this is OK if you've been saving in anticipation and you make sure that any estimated bills are corrected before they take the money. Its still a good ide to take monthly readings and send them to the supplier as then they'll have a more accurate idea of your consumption, and you will be able to anticipate what the bill will be. No surprises all round