Excessive over payments for energy

dominicm607

I recently moved house and had to change my energy provider. 

I have been quoted £300 month for a direct debit due to having no usage history in that property. 

I am very disciplined with my readings and have worked out my partner an I will use a third of the required payment each month. 

My question; I would sooner have the extra money payed to this Company (£200 per month) lodged in a saving account rather than the company presumably gaining all the interest? 

Is there anyway to negate this by lessening the payment or by claiming the interest lost back? 

If you imagine all of he customers out there with excess cash lodged with these suppliers, it must be some significant interest being racked up?

Thanks 

Look forward to hearing.  

MWT

dominicm607 said:

Is there anyway to negate this by lessening the payment or by claiming the interest lost back? 

If you imagine all of he customers out there with excess cash lodged with these suppliers, it must be some significant interest being racked up?

The value of interest is greatly over estimated these days, but in any event that isn't the way to go about this.

Hopefully you have not accepted an expensive fixed rate tariff and have remained on the capped deemed tariff?

If you disagree with the DD level that has been set you can usually opt to pay the actually amount of each bill by DD instead...

This means that you will not have the benefit of knowing you are paying the same amount each month and will be exposed to much higher bills in winter, but you will keep the money in your own account instead of theirs...

dominicm607

Thanks for your response.

I made the choice to go with the fixed tariff in light of the current situation. However wether this was the right choice or not I'm not 100% sure and regardless it's done now. 

I asked SSE over the phone of I could pay less or pay the exact amount of my usage per month and they said no they take more as they have no history of my usage. This seems unfair as explained. 

MWT

dominicm607 said:

I asked SSE over the phone of I could pay less or pay the exact amount of my usage per month and they said no they take more as they have no history of my usage. This seems unfair as explained. 

SSE were one of the few suppliers that still offered quarterly credit accounts last time I had to deal with them, ask them about that perhaps? The rate might be a little higher but it would give you what you want...

Otherwise it is going to be a matter of starting as they wish and then chasing them to reduce it as your usage becomes clearer...

What are you estimating you'll be using on an annual basis?

[Deleted User]

dominicm607 said:

Thanks for your response.

I made the choice to go with the fixed tariff in light of the current situation. However wether this was the right choice or not I'm not 100% sure and regardless it's done now. 

I asked SSE over the phone of I could pay less or pay the exact amount of my usage per month and they said no they take more as they have no history of my usage. This seems unfair as explained. 

The supplier has the historical usage for your property. Your usage may well be different but that's life. I suggest that you remind SSE of what is posted on its website:

With a variable Direct Debit you pay your energy bill in full each quarter via Direct Debit. Your bill will show the amount and date of the payment, and you'll get a discount per fuel. To set this up, please get in touch.

There may be standing charge penalties for doing this.

Astria

If we assume you'll deposit £300/month into your energy provider and use half of it throughout the year, your typical interest in a good savings account will be about £12 minus tax, so about £9. If it's in a large bank like Natwest, HSBC, etc, then it more likely to be about £1 / year.

Most providers will allow you to withdraw some of your funds if you go into credit by too much, whilst others will allow you to just pay the monthly bill based on your submitted meter readings. Depends if you prefer to budget or not.

dominicm607

Thanks for your comments all. 

I'l look into getting my payments down as soon as they will allow. 

Also, I know the interest doesn't seem like alot, but if you multiply it by every customer.. they're making alot.. 

I think the companies could do better to quote closer to what you use. 

For now I'l treat it as a no interest savings account. 

I have a excel spreadsheet to make sure my bills are accurate. 

Thanks again everyone. 

Astria

To be fair, originally energy companies didn't do this, they just collected the bill as it was produced just like every other utility company, so you had to put the money away each month yourself but of course some people didn't and then they found out that they couldn't afford the much higher winter bills so were forced to bring out a method to allow customer to budget better. Just ask them to change your account to variable direct debit and you'll be billed on usage.

Admiral_Barbarossa

dominicm607 said:

Thanks for your response.

I made the choice to go with the fixed tariff in light of the current situation. However wether this was the right choice or not I'm not 100% sure and regardless it's done now. 

I asked SSE over the phone of I could pay less or pay the exact amount of my usage per month and they said no they take more as they have no history of my usage. This seems unfair as explained. 

I hope you did not take a fixed tariff. My current comparisons are running at £280 to £360 a month, when the current deemed tariff takes this back to £150!!!!!

dominicm607

I thought go fixed incase energy prices rise again? That's my thinking? 

RogerBareford

dominicm607 said:

Thanks for your comments all. 

I'l look into getting my payments down as soon as they will allow. 

Also, I know the interest doesn't seem like alot, but if you multiply it by every customer.. they're making alot.. 

I think the companies could do better to quote closer to what you use. 

For now I'l treat it as a no interest savings account. 

I have a excel spreadsheet to make sure my bills are accurate. 

Thanks again everyone. 

They are very unlikely to have the money sitting in an account earning interest. That's not how business accounts usually work.

dominicm607 said:

I thought go fixed incase energy prices rise again? That's my thinking? 

What's are the unit prices and standing charges for the fixed tariff?

All the fixed tariffs i have seen are so massively more expensive than ofgem capped tarrifs that i personally don't think it's worth it.

The energy companies will have already factored in the April price rise and estimated the October one so you will be paying a lot of money now betting on that energy prices will rise more than they expect in October and more again next April.

Personally the extra for me is too much and I'm just going to what prices end up doing.