Switching and new direct debit

paul6105

I have just used switching service and was suggested that I could save £260 pa on monthly payments of £108. However, when I received the letter from the new supplier, I was told that the new payment would initially be £142 per month.

I know that the initial payment can be higher as the supplier has no credit history with me but is a figure almost 100% than what I am expecting to pay on a monthly basis a normal level to set the initial payment at?

molerat

The figure should be 1/12 of your annual projected use. That figure should have come from you when you told them your annual use. Which is closer to your actual annual costs, £1296 or £1704 ? What is your annual kWh use ? You did use kWh pa and not £ pm when you compared didn't you.

matelodave

what information did you put into the switching site - what you pay or what you use.
If you put in what you pay then the site will guess what you consumption was be and will invariably work out a cheaper cost. If you put in your actual consumption in kwh then it will be much more accurately calculated.
If you work out what your annual consumption (look at your bills - you should have an annual statement) was you should be able to work out what your annual bill should be, divide it by 12 and if it's less than what you are paying you can ask the supplier to reduce your dd payments.

paul6105

Thank you for both pieces of advice. I did indeed submit the kWh pa and the actual annual costs are closer to £1296 so that does give me some evidence on which to negotiate a reduction in the dd payments.

macman

It's not to do with credit history, but the seasonality. At this time of year your consumption will be at peak level (maybe 80% of your annual total is used in the coldest 3 months). Your DD would normally be set so that you enter the winter with some credit to cover this, but in your case this ins't possible, so they've upped the inital DD to cover higher winter usage. You would otherwise end up in heavier debit come the spring.
What matters is the annual cost, not the DD amount. Submit regular readings and it should come down in a few months.

StuC75

Agree with Macman, Whilst the £108 is the 12 month average, currently in winter when usage would be higher, so the new supplier is likely looking for you to be in line going into spring\summer rather than carrying a debt into summer to catch up, they would rather that to be when you build up a credit to take you over next winter (easier then if prices have also increased in the mean time - less for you to catch up)..