Wow! Thanks are due...

sjreynolds143

So I'm not brilliant at religously hunting out new deals, but I keep an eye on things. Or at least, I thought I did.

But following the last newsletter, I went to look at my Ovo account to see about switching to the fixed deal. Well.... somewhere along the line, it turns out I swapped from the online management to phone support. So there's £60 down the drain to start with. So I changed that, switched to the fix - and promptly dropped from £141 pm to £83 per month. That's a saving of £700 per annum straight away.

But the big bonus in all this is that I appear to have a balance of around £1900! So I'll be reclaiming that as soon as I can. Wow!

It's irritating that Ovo didn't think to reduce my direct debit themselves, or refund me themselves. After all, who needs a balance that large! But that's a different story. This thread is just to say many, many thanks to those nice newsletter editors, without whom I would still be paying over the odds.

System

Great news, but have you given Ovo an actual meter reading so that they can update your account on change of tariff? If the £1900 is based on estimates, then you may not have as much in the Bank as you think. Credit/debit balances can be misleading if not based on actual usage.

JJ_Egan

(That's a saving of £700 per annum straight away.)
£141 PM

Something smells wrong with that sort of saving .What are you heating ??

Terry98

You have got to watch the online management bit. They tried to put me on the phone support because I had sent them one message about a problem of their making in the previous year.

Although the monthly DD's should be equal to 1/12th of your projected usage OVO like you to pay in advance so this can mean you pay more than you should.

Do these comparison sites take the above into account when they give you the yearly savings? Of course OVO pay interest on credit balances but I am sure that is not taken into account!

System

Terry98 wrote: »

Although the monthly DD's should be equal to 1/12th of your projected usage OVO like you to pay in advance so this can mean you pay more than you should.

Do these comparison sites take the above into account when they give you the yearly savings?

There is a lot of confusion around about monthly DD payments. Firstly, all suppliers pay for their energy in advance of supply so it is not unreasonable for them to ask customers to pay in advance. This reduces the amount of supplier borrowing and keeps the cost of energy low to the customer. Secondly, DD payments are only payments made on account. They are used to offset the charges for gas and electricity: you will not end up paying more than you should for the energy that you have used at the agreed tariff price. You may have one extra credit on your account when you leave.

All comparison sites are accredited by Ofgem. They all work in a mandated way but some, like MSE Cheap Energy Club, do more. All cost projections are based on a rolling 12 month period. If the total annual cost is, say, £960 a year and you use the projected usage then that is what you will pay irrespective of your DD monthly amount. The cost savings are based on a simple calculation of the next 12 months minus the last 12 months. DD payments are not a factor. The only 'flaw' in the Ofgem-mandated methodology is the cost of the next 12 months at the end of a fixed term contract. The 'default' assumption is that you will do nothing and move back to the supplier's SVT. This leads to inflated costs, and inflated savings, when you switch to another fixed term tariff. This can lead to the impression that you can save money when switching when your new tariff actually costs you more. MSE CEC gets around this problems by giving a simple 12 months now compared to 12 months on these tariffs projection.

DD payments are also complicated by a direction from Ofgem that suppliers are now to manage customer debt. For Autumn/Winter switches, some suppliers now front load the monthly DD payment based on the simple fact that most people will use 70% of their annual energy in the 5 winter months. This can give the impression that the supplier has changed the 'quote. Nothing can be further from the truth: I repeat monthly payments are nothing more than money held by the supplier on account. At least, Ovo gives you some interest on any credit balance.

Terry98

Many thanks for your detailed reply.

I can accept that suppliers pay in advance and have no problem with OVO wanting their payments in advance.The 5% interest though will not make me rich although an extra £50 is a good saving if you have the money!

I cannot get my head around the methodology used by the comparison sites but I do not agree with assuming the new tariff would be the supplier's SVT. All I want is a simple bottom line figure which, I appreciate, is almost impossible to achieve.

I went for the OVO 2 year fix a couple of months ago and have not been convinced I did the right thing until it became all the rage a few days ago.I knew my exact usage and I was still confused but because the best savings were less then £100 I thought the £60 online discount would make up for it and I am happy with my smart meter and OVO customer service most of the time.

sjreynolds143

Yes, I have sent them that. In fact, that's a pre-requisite for getting my balance sent back to me!

sjreynolds143

JJ_Egan wrote: »

(That's a saving of £700 per annum straight away.)
£141 PM

Something smells wrong with that sort of saving .What are you heating ??

To be clear, I wasn't using that amount of energy. I think that there might have been one single month in the entire year where I hit it. My last bill was only £46. I don't now recall why I was on £141 to start with, but clearly I shouldn't have been. Checking regularly is key, I have now learnt!

sjreynolds143

I think that the bit I am crossest about (apart from my own stupidity/ineptitude) is the fact that they allowed me to amass such a huge balance. I submitted readings to them on a semi-regular basis - not as often as I should, but often enough that they could see the balance increasing. Yet they didn't review the payments or offer me a refund. Both of which, in my opinion, they should have done.