Must energy companies use customer meter readings on cap change date?

Chrysalis

I am not encouraging it, I just understand it, people do what they got to do to feed their family.

Instead I am advising people to switch to variable direct debit, a legal way they will save some money.

[Deleted User]

How Chrysalis said:

I am not encouraging it, I just understand it, people do what they got to do to feed their family.

Instead I am advising people to switch to variable direct debit, a legal way they will save some money.

How exactly do people save money by being on a variable direct debit? 

Ultrasonic

Chrysalis said:

Instead I am advising people to switch to variable direct debit, a legal way they will save some money.

I'm not trying to be argumentative but in case that misleads anyone I'll mention it won't strictly save anyone money. What it will do is prevent people building up a short term credit balance but anyone doing so would need to factor in keeping enough savings to cover the winter months. For anyone who things they may struggle I would personally encourage them to stick to a fixed monthly DD amount.

Chrysalis

Ultrasonic said:

Chrysalis said:

Instead I am advising people to switch to variable direct debit, a legal way they will save some money.

I'm not trying to be argumentative but in case that misleads anyone I'll mention it won't strictly save anyone money. What it will do is prevent people building up a short term credit balance but anyone doing so would need to factor in keeping enough savings to cover the winter months. For anyone who things they may struggle I would personally encourage them to stick to a fixed monthly DD amount.

Save money in two primary ways, you pay in arrears instead, so means you paying your bills later, that is in affect a saving.
Also a large bill doesnt mask usage, so encourages cut backs, whilst fixed direct debits make people treat their electric as if its unmetered.  This notion of fixed direct debits preventing people from high bills is a false one, its not unmetered usage, if you use more electric than you paying for you still have to pay for it, and the increased direct debits will still happen but just stealthily instead when they creep up over time.  As an example my direct debit with octopus is now almost 80% higher than when I joined.

The issue you are talking about is for people who dont know how to budget.  Fixed DD's primarily benefit shareholders as the vast majority of customers, are in credit for most of the year, some customers have a 4 figure credit balance all year round.

So you could e.g. setup a second account which has the direct debits send a fixed amount to that account all year round, and replicate what you are saying, but the difference is the money is in your account and in your control until its actually used on electric you spend and on top of that you gain at least 30 days worth of billing as you paying in arrears (90 days if paying quarterly).

That is probably bigger than the £200 loan from the government.

You make it sound like winter is cheaper, but in reality 10 months of the year is more expensive to cover those two cold months.  Its still paid, except you paying earlier.

Ultrasonic

Chrysalis said:

Ultrasonic said:

Chrysalis said:

Instead I am advising people to switch to variable direct debit, a legal way they will save some money.

I'm not trying to be argumentative but in case that misleads anyone I'll mention it won't strictly save anyone money. What it will do is prevent people building up a short term credit balance but anyone doing so would need to factor in keeping enough savings to cover the winter months. For anyone who things they may struggle I would personally encourage them to stick to a fixed monthly DD amount.

Save money in two primary ways, you pay in arrears instead, so means you paying your bills later, that is in affect a saving.
Also a large bill doesnt mask usage, so encourages cut backs, whilst fixed direct debits make people treat their electric as if its unmetered.  This notion of fixed direct debits preventing people from high bills is a false one, its not unmetered usage, if you use more electric than you paying for you still have to pay for it, and the increased direct debits will still happen but just stealthily instead when they creep up over time.  As an example my direct debit with octopus is now almost 80% higher than when I joined.

You're right on the first point but with interest rates where they are I don't think it's significant. I understand your second point but disagree it makes payment on receipt of bills wise for those who will struggle to pay.

Chrysalis

For what its worth I do accept there is a placed for fixed DD, for people who absolutely struggle with managing variable living costs it serves them, but I think you are under estimating a lot of people, not everyone would have a problem with it, and remember fixed DDs were not around forever, it used to be 90 day quarterly bills manual payment or prepay as the only two choices,.

QrizB

Chrysalis said:

As an example my direct debit with octopus is now almost 80% higher than when I joined.

That's not a big surprise; energy prices have more than doubled in the past 12 months.
In April 2021 I was paying 15.3p/kWh for electricity and 2.6p/kWh for gas.

Chrysalis

QrizB said:

Chrysalis said:

As an example my direct debit with octopus is now almost 80% higher than when I joined.

That's not a big surprise; energy prices have more than doubled in the past 12 months.
In April 2021 I was paying 15.3p/kWh for electricity and 2.6p/kWh for gas.

Ironically it only went up a fiver in October (account £960 in credit), so most of that 80% was pre October which I forgot to mention.

Ultrasonic

Chrysalis said:

For what its worth I do accept there is a placed for fixed DD, for people who absolutely struggle with managing variable living costs it serves them, but I think you are under estimating a lot of people, not everyone would have a problem with it, and remember fixed DDs were not around forever, it used to be 90 day quarterly bills manual payment or prepay as the only two choices,.

I made exactly this last point myself in another thread recently 🙂. And to be clear I didn't say everyone would have a problem with variable DDs.

Just to throw in a different variable, I have a Santander 123 account so I'm financially better off paying DDs that spread costs evenly across the year (as there's a max payment per month that would be exceeded in winter).

wild666

[Deleted User] said:

How Chrysalis said:

I am not encouraging it, I just understand it, people do what they got to do to feed their family.

Instead I am advising people to switch to variable direct debit, a legal way they will save some money.

How exactly do people save money by being on a variable direct debit? 

Being on a variable DD means that you only pay for the electric and gas used if you send in monthly readings. Some people are trying to find ways of using less.

I've cut my electric usage down from 184 to 194 kWh to between 116 and 126 kWh per month  and gas from 130 to 160 kWh down to between 60 kWh in winter and as low as 11 kWh or less in  summer. It was all done by turning off appliances not in use and lowering the temperatures on the boiler.