Is it bad for this forum to recommend variable DD payments

casjen

Of course its not worrying. Im amazed just how many people are incapable of managing their house accounts so poorly. Its so simple to do. I estimate the next years useage on past years useage  . Work out cost and divide by 12 and the add 5%. I put this into a savings account each month and have my power bills come out of this. Started this in may 10 years ago to build up initiall amount. A surplus gradually built up and todate their is over £500 in there. .. Been thru many supplier failures last 12 months with both owing and being owed and  I switched to full month DD due to the present crisis and the £150 rebate will go in there so from now my system will run even better.

 This is my version but with some simple monthly budget housekeeping anybody can keep on touch of bills. Sometimes it might mean missing out on a hol for one year of going down the pub for a month or too to build up an initial pot. 

 Of course a lot of people were struggling before and will even more so now but a bit more personal responsibility and effort would go a long way no matter your situation.

The_Fat_Controller

I will get two financial shocks, one in July (x 2.25) after I come off my fix and again in October after the next cap has kicked in.

However, as I fully understand what I use and what I am going to pay in July and the implications of the cap change later on, I am ready for it.

As can be seen from this forum, there are so many people that just do not understand how their contracts work.

Marvel1

Variable wouldn t bother me as I'm on a prepayment and pay monthly to top up what is needed, only different each month. My electric seems to the same all year and gas a bit more but not much.  


Work out standing charge and that is my minimum what I would have to pay anyway. 

Section62

GunJack said:

Not only does it smooth payments out for the year and so help budgeting, but a big one which a lot of people overlook is that having that credit means in a SoLR situation (or even just a regular change of supplier) it gives a buffer during the period of being moved to a new supplier and the inevitable delay in getting the new accounts set up and running properly. 

In terms of this being a "big one" - are there any examples of people having their credit meter gas/electric supply cut off because the SoLR has failed to get their backside in gear to bill that customer?

It doesn't seem very likely, and if it did happen I imagine it would make for an excellent complaint and a wedge of compensation.

Surely the only significant issue would be for people who really struggle with budgeting, and couldn't be sure of putting money aside to pay the bill when it eventually arrives.

In which case, building up a signficant credit 'buffer' and maintaining it over the long-term, on the off-chance of your supplier going bust, seems to be a bit of a sledgehammer/nut solution.  If you have the money and budgeting skills to maintain a buffer with an energy supplier then it is only a small step to having that buffer held in your own savings account as 'emergency money'. (I appreciate this doesn't work for everyone)

(ditto for regular change of supplier situations)

Northern_Wanderer

This is a Money Saving forum. We are ALL paying more in our bills for companies going bust with our cash (our credit on our energy accounts) in their pockets.

My theory is, that if nobody had a credit balance then we the consumer would not be paying so much to recover the costs of failed companies in our future bills. Ok, we would be paying for the SOLR process of moving accounts, but not repaying the debt of the failed company to the consumer that had a credit.

So, if everyone paid a variable rate DD, it's less risk to the consumer.

But, many people are not able to manage their money in a way that would not be a struggle during the winter months. It's simple budgeting though.

It has been mainly smaller companies that have gone bust. But think how much credit, BG for instance, is holding of customers cash. If they went bust, how much do you think would be added to our future bills to recover the payout of customers credits on their energy accounts? We still have the Big 6 holding a lot of credit.

Time to put the power into the consumers hand, that is why I am changing to variable monthly DD for my gas, electric has always been paid each month by variable DD.

QrizB

Northern_Wanderer said:

But, many people are not able to manage their money in a way that would not be a struggle during the winter months. It's simple budgeting though.

That's an interesting way of thinking of it but I guess it works.

If people could budget properly, people would pay by variable DD and small energy companies wouldn't be able to fund their operations from customer balances. Which means Avro, Neon Reef and their kind would never have got off the ground (or, if they had, their failure would have cost their shareholders money, not their customers).

You could even argue that we're all cutrrently paying £65/yr extra on our energy bills to make up for the failings of the school system!

Mstty

Thanks for all the replies to the original post, this is a real eye opener to see the different opinions. Valid all in their own right from the repliers perspective.

We are all very fortunate here to understand the basics and more of energy provision and payment.

But for the average Joe/Jane that comes to this forum for the first time. Out of fear of what is happening with their supplier and bills, they literally no nothing other than their payment each month.

So it is clear there will be a rise in October and once explaining the basics then scaring them finally with another rise in October I still feel that the very basics should be yearly usage/the current price cap and SC ÷ 12 and that's their payment. To add anything else at this stage will just create anxiety and many people cannot save if they switch to variable again this is something many forum members can do but I don't feel the wider public can especially with food and other fuels also increasing.

Personally happy paying the same amount each month knowing where I am. Accruing credit in the summer and using that in winter not worrying about being too cold as I have enough in the energy bank.





 

Northern_Wanderer

QrizB said:

If people could budget properly, people would pay by variable DD and small energy companies wouldn't be able to fund their operations from customer balances.

Yes I know, and we do not yet know the consequences if we did all suddenly start paying each month by variable DD. I guess the energy companies would have to budget better/ differently. Perhaps Symbio wasn't too bad after all, I only paid one month in advance with their odd billing system! I owed the £6 at the end of the day when they went bust.

Chrysalis

QrizB said:

Northern_Wanderer said:

But, many people are not able to manage their money in a way that would not be a struggle during the winter months. It's simple budgeting though.

That's an interesting way of thinking of it but I guess it works.

If people could budget properly, people would pay by variable DD and small energy companies wouldn't be able to fund their operations from customer balances. Which means Avro, Neon Reef and their kind would never have got off the ground (or, if they had, their failure would have cost their shareholders money, not their customers).

You could even argue that we're all cutrrently paying £65/yr extra on our energy bills to make up for the failings of the school system!

Probably true, they were never proper energy suppliers anyway.  Was kind of a false market to create the illusion of competition, real competition is if it happens on the wholesale level from producers.

Chrysalis

Mstty said:

Thanks for all the replies to the original post, this is a real eye opener to see the different opinions. Valid all in their own right from the repliers perspective.

We are all very fortunate here to understand the basics and more of energy provision and payment.

But for the average Joe/Jane that comes to this forum for the first time. Out of fear of what is happening with their supplier and bills, they literally no nothing other than their payment each month.

So it is clear there will be a rise in October and once explaining the basics then scaring them finally with another rise in October I still feel that the very basics should be yearly usage/the current price cap and SC ÷ 12 and that's their payment. To add anything else at this stage will just create anxiety and many people cannot save if they switch to variable again this is something many forum members can do but I don't feel the wider public can especially with food and other fuels also increasing.

Personally happy paying the same amount each month knowing where I am. Accruing credit in the summer and using that in winter not worrying about being too cold as I have enough in the energy bank.





 

It is good you have respected the replies, but as we can see, there is many people getting sudden hikes with fixed DD as well, I have seen 4 reports now of a 500%+ hike, there will be hikes again in October anyway regardless if people are on fixed or variable.

Whatever people prefer as their form of payment we are all in for a rough ride.

I think energy might overtake rent/mortgage as the biggest outlay for some people, if this doesnt get controlled somehow.