OVO/Big Switch Advice needed.

toastedmonkey

I need some advice off you energy savvy people.

I am currently with OVO and I am considering switching to E-on in the Big Switch, however I think I'll end up paying more. The details are as follows:

My current arrangement with OVO is the "Cheaper Energy (Fixed to June 2016)" which I have been on for a little over a year.
My assumed annual consumption of electricity is 3200kWh
My assumed annual consumption of gas is 13500kWh

I currently pay £59 a month, and OVO recommend reducing that to £53 a month
I am currently around £200 in credit (they pay a nominal amount of interest to accounts in credit - In July I received 33p)
There is a £30 early exit fee for gas and electricity - £60 in total.

Before the Big Switch was announced I was considering switching to OVO's Better Energy All online deal, it would cost me £60 (which would come out of my balance) but would save me money per month.

However, having got my estimates for the Big Switch deal from E-on, it estimates my new monthly bill would be £71 a month. A whopping £18 a month more than if I stuck with OVO and their new recommendation for my Direct Debit (this is before switching to another, cheaper OVO tariff.)

If I switched to E-on it would cost £60, so I should get a refund from OVO of about £140, but over the course of the year the £71 a month deal with E-on would mean £216 more coming out of my bank account. With the £140 refund I would, realistically, be £76 worse off over the next 12 months.

I think? I'm concerned I've made a massive blunder with the maths. It seems odd that I'd be worse off switching to a better tariff.

Anyone got any advice or a better calculator than me??

System

Credit means absolutely nothing: its the final bill that counts. If I put your usage into a comparison site it gives me a total annual cost of £1096.(version 3) The MSE CEC offer for my region and your usage comes out an annual cost of £837 per year.

This equates to a total saving of £259 minus £60 exit fees plus £30 cash back OR £229 for the year.

Staying with Ovo (Better Energy All Online) would cost £898 for the year. As Ovo do not allow tariff hopping without penalty the cost would be £958. This still equates to a saving of £138 per year.

So by switching to E.oN you would be £91 per year better off than by staying with Ovo on a Better Energy tariff. As it would be a new contract with Ovo, you could leave at anytime without penalty. Moving to E.oN will leave with you with potential exit fees of £60 but you can tariff hop without penalty.

PS I should have added that it is impossible to do these calculations based on monthly DD payments. They are nothing more than a payment on account. You could well end up in a situation with a Winter start where E.oN will ask you to raise your monthly DD to offset higher winter usage. It shouldn't happen but it does.

toastedmonkey

Ah okay thanks, I thought there was something wrong with my logic.
So ultimately the price I am paying for the energy I am using over the next 12 months is much cheaper with E-on, regardless of the DD.

Would I be right in thinking that the OVO DD is so low as to reduce the amount I am in credit? And E-on's £71 is what they expect the cost of 12 months of energy split evenly over 12 months, as to be neither in credit nor in arrears at the end of it, roughly?

JJ_Egan

You can change the OVO DD amount yourself .
They certainly do not lower the DD to avoid paying the interest .But neither do they allow you to bung in £300 a month to gain 3% unless your consumption is around that figure .
My OVO debit is basically set at the amount i used last year divided by 12 . That is on actual usage rather than your assumed usage .Summer months i build up a couple of hundred credit .

System

toastedmonkey wrote: »

Ah okay thanks, I thought there was something wrong with my logic.
So ultimately the price I am paying for the energy I am using over the next 12 months is much cheaper with E-on, regardless of the DD.

Would I be right in thinking that the OVO DD is so low as to reduce the amount I am in credit? And E-on's £71 is what they expect the cost of 12 months of energy split evenly over 12 months, as to be neither in credit nor in arrears at the end of it, roughly?

Yes, in theory, the amount paid each month should be 1/12 of the annual consumption. However, your projected annual consumption is at best a guess. If we have a cold snap over Christmas, then this can cause the supplier's algorithm to cough up a strange increase in the monthly payment. Ovo seems to have less volatility when it comes to monthly DDs as you are paying for supply one month in advance. That said, whether it's Ovo or E.oN you will ultimately only pay for the energy that you use.