Saving money can be expensive !!!

malofkent

Switched electricity provider via MSE as comparison showed I could save around £220 a year. My current Direct Debit is £62 per month and Im over £100 in credit.....so my new provider sets my DD at £91 a month.....methinks this saving money lark is pretty costly

CashStrapped

When you compared and switched, did you use a DD figure for comparison. Or did you calculate your annual KWH use and compare with that?

If you used a DD figure, this can lead to a very inaccurate comparison. Firstly a monthly DD figure may bear no relation to your actual annual Gas and Electricity KWH use. Second, a DD figure may not fully distinguish between Gas and Electric use, so it cannot calculate which tariff is best based on what you use most.

Regarding the new supplier putting your DD up. That is because they are predicting what you may use in the future based on what you are using right now.

If you are comparing your use with last year only, this can also be misleading as last year was very very mild. So you usage this year may already much higher that last.

So, the energy company will look at your usaged and adjust accordingly.

If it gets it correct then your balance should not go into a high credit or debit.

If it gets it wrong, you can either look forward to a very high credit balance (which they will transfer back to you) or a debit balance (which you will have to pay off at some point).

You can make their system more accurate by supplying monthly meter reads. This way you will know your exact balance after the DD has credited the account .

So, just because they have put the DD up. Does not mean they are charging you more. It just means they think you will use more than you indicated when you signed up.

As I said, if they are wrong and you use less, you will get a credit back to your account when you request it.

System

OVO, for example, will charge up to 150% of the calculated DD for winter switches to reduce the potential for a big debit balance. They will adjust the DD downwards during the course of the year. You will only pay for the energy that you use - anything else would be theft.

malofkent

Thanks for the replies, I had actually been giving meter readings for the last 18 months every month without fail, so thought this would make my current DD pretty accurate, plus the fact Im over £100 in credit shows the level was set about right, but to find an increase of around 40% on my direct debit did seem a little excessive. Will see how it all goes and I suppose I can always bail out and move my business again. Thanks again

teddysmum

malofkent wrote: »

Thanks for the replies, I had actually been giving meter readings for the last 18 months every month without fail, so thought this would make my current DD pretty accurate, plus the fact Im over £100 in credit shows the level was set about right, but to find an increase of around 40% on my direct debit did seem a little excessive. Will see how it all goes and I suppose I can always bail out and move my business again. Thanks again

If your monthly payments result in a large amount in credit, you can request a refund.

CashStrapped

If you know (based on your usage) what your DD should be set, ring the company up and request they reduce it back to the level it was initially amount.

As long as you are in a credit position they usually will.

I have done this many times when their automated system tries to up it. They may initially try to talk you out of it. As long as you are firm, they will usually reset it.