In credit. Shouldn't they contact me?

Boxman

matelodave said:

As others have said, you use less energy in the summer than you do in the winter so you need your account to be in credit by around twice your monthly DD payment by October, otherwise you'll end up with a very large debt around the end of March.

Surely that wouldn't be a problem? The only thing that matters is that the account is in balance at the end of the agreed tariff period.  For the last few years I've been on 12 month fixed prices tariffs which happened to start at the beginning of October. Inevitably my account had a large theoretical debit balance at the 1st April but keeping a constant repayment each month combined with reduced heating usage over the summer always resulted in the balance being around zero at the end of September.  The supplier's computer sometimes tried to increase the dd in the spring but a simple e-mail with a few figures for illustration always resulted in the payments being reduced to the agreed amount again.

matelodave

Boxman said:

matelodave said:

As others have said, you use less energy in the summer than you do in the winter so you need your account to be in credit by around twice your monthly DD payment by October, otherwise you'll end up with a very large debt around the end of March.

Surely that wouldn't be a problem? The only thing that matters is that the account is in balance at the end of the agreed tariff period.  For the last few years I've been on 12 month fixed prices tariffs which happened to start at the beginning of October. Inevitably my account had a large theoretical debit balance at the 1st April but keeping a constant repayment each month combined with reduced heating usage over the summer always resulted in the balance being around zero at the end of September.  The supplier's computer sometimes tried to increase the dd in the spring but a simple e-mail with a few figures for illustration always resulted in the payments being reduced to the agreed amount again.

You are absolutely correct that when you take on a 12 month deal the proportion of time that you'll be in credit or debit will will vary depending on when you start.

IMO the best time to take out a deal is around Oct/Nov and you'll be in debit for almost 12 months (if you've accurately estimated your annual consumption). Alternatively take one out in April and you'll have racked up a healthy credit by the time winter comes .In both cases, if your DD has been correctly set, your account should balance at the end of 12 months

However it does rely on you having a pretty accurate idea of your annual consumption, having a DD that accurately reflects your annual cost and keeping an eye on your consumption over the period. The problem comes when energy companies start faffing around with the DD or when customers don't know how their energy profile changes throughout the year and wonder why they are credit or debit and can't work it out for themselves.

This forum is full of customers who have racked up ginormous debts or even credits because they dont know what they use, when they use it and how much it's costing them and TBH it's quite hard to educate some of them

MWT

Also keep in mind that some of the newer and smaller energy companies do expect you to keep your account with a positive balance so they tend to bill in advance at the start of the contract period and if you are starting in Oct/Nov they may want to to make sure you stay positive over the winter period.

Boxman

However it does rely on you having a pretty accurate idea of your annual consumption, having a DD that accurately reflects your annual cost and keeping an eye on your consumption over the period. 

You are of course quite correct. My observation only applies as long as the customer takes the trouble to monitor the account and give accurate monthly readings on the appropriate date.  As you say it is only relevant when it is not a requirement to maintain a credit balance throughout the contract period.