Is it bad for this forum to recommend variable DD payments

400ixl

For me its quite simple.

Give people the options and the pro's / con's and let them make an informed decision. To not tell them an option is what would be wrong IMO, so no it is not bad to tell people of the option, quite the opposite.

Northern_Wanderer

Also, I think in these times, monthly billing should be the default, so people know where they stand and also that customer reads should be required so they are not billing on estimates.

EDF for instance only do 6 monthly billing on a fixed DD. That makes me uncomfortable because it creates the potential for people to get into a lot of debt, especially with the hike in prices now, hence the huge DD increases some are seeing, which can be unmanageable as well....

Spies

Took months to get my credit back from UP, Octopus bill me in arrears and that suits me fine.

Sea_Shell

Northern_Wanderer said:

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.

Be careful what you wish for.

What effect would the drying up of cashflow have on the suppliers?  Especially the smaller ones who have survived until now.

You could "stick it to them" and not give them a penny credit.

Which could trigger another round of insolvencies, more SoLR claims, increasing costs for everyone.

The law of unintended consequences.

jimjames

Mstty said:

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.
 

Problem is that very many people don't actually know their usage. All they know is the DD they pay each month and not even whether than covers their use. There is a big education gap, hopefully the current situation will have opened a few eyes.

pochase

One advantage of the variable direct debit would be that people stop thinking they have a "all you can eat" use of energy, everything been paid with the direct debit amount, and suddenly get a bad surprise when their accounts are in debt. 

Chrysalis

Sea_Shell said:

Northern_Wanderer said:

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.

Be careful what you wish for.

What effect would the drying up of cashflow have on the suppliers?  Especially the smaller ones who have survived until now.

You could "stick it to them" and not give them a penny credit.

Which could trigger another round of insolvencies, more SoLR claims, increasing costs for everyone.

The law of unintended consequences.

If they give me shares in return for a credit balance I will be happy to stay on fixed DD.

So thats your answer, sell some shares, use investment for cashflow.

Ultrasonic

@Mstty I broadly share your concerns, and have expressed such when considering advice to those who are most likely to struggle to pay higher bills. Currently I'd say there is a stronger argument than ever for this due to the uncertainty over the price rise in October, meaning even the wisest here can't truly budget for what is to come if on an SVT. The jump in monthly costs for a summer at the current price cap to next winter at whatever the October cap is could be scary, particularly for the elderly who need to heat their homes more of the time and often to higher temperatures than a typical younger family). 

london21

I recently switched to the variable DD. 

Each person's circumstances are different. 

I like it because we have reduced our usage, good with my finance and don't like having large credit because when company goes burst don't want the hassle of chasing my credit. 

My current supplier bulb are on special administration. 

Northern_Wanderer

Sea_Shell said:

What effect would the drying up of cashflow have on the suppliers?  Especially the smaller ones who have survived until now.

You could "stick it to them" and not give them a penny credit.

Which could trigger another round of insolvencies, more SoLR claims, increasing costs for everyone.

The law of unintended consequences.

Absolutely, that is an unknown. But at least they wouldn't go under with all our money....that we have to pay back in our bills. That is my point. It might just be the kick the government needs to do something.