Recommended amount of credit with energy company

faceofit

Im a FTB only being in our house since the start of December then moving from British Gas in January we have a direct debit to octopus energy of £70 per month for gas and electric but only using about 50-60 for past couple of months but now have credit of £94 on the account I know I had to give them the first month upfront but in a short amount of time £90 credit going into the summer seems excessive should I be reducing my direct debit or is this about the right amount to have in credit. Any advice would be helpful.

Benight

https://www.moneysavingexpert.com/utilities/lower-energy-direct-debits/

matelodave

Are the bills based on actual meter readings or on estimates - you can usually check - A = Actual, C=Customer, D=Deemed, E=Estimate.

You will obviously use a lot more energy in the winter than you will in the summer so most energy companies will estimate your consumption over 12 months (unless you give them your own figures or estimates) and then divide it by 12 to give a monthly average for your Direct Debit.

So it depends on when you start your contract whether you'll be in credit or debit for most of the time. Starting a contract in say April, when it's warmer means you'll build a healthy credit before winter, however starting in October or November means you'll probably have a fair amount of debit until the middle to the end of the following summer.

The trick is to try and monitor your energy profile to optimise your DD so you dont end up to much either in debit or credit and to ensure that your account balances out to zero at the end of your contract.

Being a FTB probably means that you dont have a good feel for your consumption unless you've been keeping your own records of monthly readings to ensure that your consumption is in line with expectations.

You do need to make sure that your bills accurately reflect your consumption and meter readings and aren't based on estimates - check your billing dates v reading dates as most can end up being a month or even three months adrift so it's everso easy to think that you are well in credit when in reality your bills aren't actually up to date.

Check your consumption (makes ure its based on actual meter readings and not estimates) for December, January and February and even March to see if you are really using more than your DD amounts.

My experience shows that I use about £150/mo in those three months but only pay £75/mo DD and about £35 a month in the six months of summer but still pay £75DD so it balances out.

PennineAcute

I have found that my monthly electricity usage is fairly constant over the year. You've also seen how much gas you have used since December, so by the end of May, you will see what your gas use will be for the warmer periods. You should be able to get a reasonable estimate from your usage so far.

Also by the end of May, you will have 6 months usage - combining both cooler and warmer periods. Doubling that would also give you a reasonable estimate.