Atlantic Gas and Electric - 'Free' month

zalek

espresso wrote: »

You seem to think that you can fiddle the loyalty scheme by increasing your payments!

One month free in one year, works out at 8% discount.

:rolleyes:

Yes and No. Yes, I think I can fiddle with the scheme. And No, the money you are making out of it it's not 8% at all. Read on, please.

You pay for the bills each month by direct debit. Lets say it’s 100 a month for both electrict and gas. After a year of those payments, you get back the 100. This is, as you said, 8.33% (1/12) out of 1,200 payments you made over a year . However, this 1,200 was paid over 12 months, and not as one lump sum.

Now, open a spreadshet and see, how much interest you would earn if you would open a saving account into which you would pay 100 a month for 12 month with fixed rate 8.333%. It would be £54.17 (and not £100) which is 4.514% of your total investment at the end of 12 months (12 x 100 = 1,200; 54.17/1,200 = 4.514%).

So, if I was to get back £100 out of the above investment (the same amount I’m going to be paid back by Atlantic), the fixed rate would have to be 15.38% tax free!! And if I was to pay the lower band tax on this investment and still wanted to get my 100, the actuall rate would have to be 19.23%!!

Now, lets say I can put aside 500 a month. If I be saving them in ICIC at fixed rate of 6.4% (the best you can get at the moment) I’ll get after a year of saving and paying my tax about £168.

But if I set up my direct debit for gas at £250 and for electric at £250, after twelve months they will pay me back £500. Almost 3 times as much as the best saving account could earn. And even if I’m not going to be eligible for any further loyalty scheme with them, it doesn’t matter as to get £500 back from that scheme one would have to be paid over many many years to get £500 altogheter. I’d rather have them now, don’t you? And even if they do not want to pay back the overpayments, you just switch supplyer and get your final bill with a check for the amount overpaid. So, it's worth doing if you can put aside few hundred pounds. It doesn't cost your time and money and you get 15.38% tax free return on this 'investment'.

Please tell me that I’m wrong because now comes the reall treat – I run small business with 30 residential properties for which I pay the bills… and I can put aside a lot of cash...

Terrylw1

Ok,

It is a good deal in my opinion because it's based on your payments, not your usage. So, you can overpay with the intention of getting back some extra on this basis.

It's subject to VAT though, it's not tax free. I'm not sure how that effects the refund but energy Suppliers have to have a VAT line on the bills. So, it may be worth checking but from experience of crediting customers in this industry, the customer has always received the full sum and the VAT has not affected it. Might be worth checking that though with this deal as it's pretty unusual, although very nice!

Is it also available to business customers then?

I think you will also find a clause that covers a threshold of what you can pay to stop huge sums being payed for this intention. Suggest you check what that clause is because they have the power to change your DD whenever they like without your permission (as long as they notify you).

It also makjes me think that they are very heavy handed on reviewing DD's as well so they don't get conned this way.

Note that it's also uninterupted supply. That doesn't mean at a technical level, it means that the account must be in your name for that period. If you are a landlord that won't be the case unless your tenancy agreements cover utilities.

Terrylw1

i_like_shoes wrote: »

I've just had my bill in for gas and electric, and how come my electric is double my gas when i mainly use gas for heating and cooking????

Can you provide more info e.g. estimates or firm readings as Expresso says or any meter changes or change of supply events recently???

Terrylw1

andrew-b wrote: »

To answer Terry, the money you get back appears on the Atlantic statements after the VAT calculation and it goes straight to you bank account.

Cheers Andy.

So, it's applied as a standard credit which is good. Certainly seems worth a look.

zalek

andrew-b wrote: »

The reason my direct debit for gas was too high in the first place was i moved to atlantic via energyhelpline using estimates of usage and also our usage changed through the year (new boiler, cavity wall insulation). Only whenAtlantic became aware of your actual usage they'd put the scuppers on this little loophole!

Well, I wonder how long it takes them to realise that and what if they go down you start keep ringing their customer service asking to rise your DD. Surely you will at some stage get to someone who'll increase your DD. You can always tell a story you have more money at the moment and want to pay in more and have a piece of mind in future and all that kind of stuff. Whatever comes to your mind.

But having 30 accounts with them, even not a huge overpayment will add up very nicely.

I have made a calculations and because the way the cashback is based (average monthly DD), it's enough trying to move up DD to, for example, 500 (250 gas + 250 electric). even if it gets noticed and lowered next month you have already pumped up the monthly average. Then sit on the phone and try to do it again - nothing to lose, they have a free number, he he.

Anyway, anyone can made up his/her mind about it. I just thought it's a nice loophole (only need to get my hands on T&Cs to make sure there aren't any caps but I really doubt it)

Terrylw1

Zalek, if you pay a large sum in like £250 which may be way to much they will re-assess your DD and take into account any credit which will lower your DD less that what you would have paid if you hadn't payed the larger sum. So, it should even out.

It does all depend on how strict they are in checking so it sounds like you would benefit from trying it out for a year anyway.

i_like_shoes

espresso wrote: »

Is this bill based on actual readings or estimated?

Actual readings

Terrylw1

i_like_shoes wrote: »

Actual readings

Is is possibly catching up because your previous bills have been estimates? If your Supplier underestimates you for several quarters then they get a reading off your meter, it can cause a larger bill due to the jump.

Is that the reason or was your previous bill also to an actual/firm reading?

roddydogs

Atlantic refunds your over payment just before your rebate is due, They ARE NOT Daft!

Mercenary

We got our rebates with no bother.:D

I did keep an eye on our outstanding balances and phoned Atlantic mid-year to increase our D/Ds as the original amounts weren't enough to keep up with our actual usage. Especially as we had such a rotten 'Summer' and put the heating on occasionally.
At least the few days without electricity during the Great Flood helped with the bills