Is it bad for this forum to recommend variable DD payments

Ultrasonic

Gerry1 said:

Ultrasonic said:

Gerry1 said:

Ultrasonic said:

jrawle said:

Fixed monthly direct debits are a fairly recent phenomenon anyway. It wasn't that long ago when everyone paid a quarterly bill for the energy they had used in the last three months. Those that couldn't manage to budget were on prepayment meters.

Yes, and the current system of distributing the bill equally across monthly direct debit payments was presumably brought in to be an improvement on this.

If it's so good, why are energy companies the only ones to use it?

I can't think of anything appropriate to compare to. Can you? 

Petrol, groceries, telephone calls, restaurants, road and tunnel tolls, taxis...

No, I don't see how any of those are equivalent.

The single most unique aspect for me is the significant seasonal variation of energy use. This combined with how large energy bills can be (especially now!) and the basic necessity of at least some energy use make this a special case in my book.

Peggy0628

I have recently changed to variable DD.
Before then I was paying quarterly by bank transfer when the bill arrived. I have now changed to monthly bills instead and variable DD (DD rates are cheaper). I save a bit of money compared to non-DD rates and monthly bills mean I don't have to pay 3 months worth of usage in one go. I have smart meters so always have a fairly good idea how much the bills will be. Before the prices went up today, I was paying around £70/month for both (that was for Jan and Feb with heating on), will be less usage in the summer. Works for me but may not suit everyone.

Mstty

Peggy0628 said:

I have recently changed to variable DD.
Before then I was paying quarterly by bank transfer when the bill arrived. I have now changed to monthly bills instead and variable DD (DD rates are cheaper). I save a bit of money compared to non-DD rates and monthly bills mean I don't have to pay 3 months worth of usage in one go. I have smart meters so always have a fairly good idea how much the bills will be. Before the prices went up today, I was paying around £70/month for both (that was for Jan and Feb with heating on), will be less usage in the summer. Works for me but may not suit everyone.

Out of interest have you worked out what you variable payments will be from October with the predicted further 30% rise in the price cap to today's rise? That being the start of the heaviest usage months.

We have and it quite frankly scared us and would ruin half the year if we hadn't come up with a plan and projected our usage and calculated the costs and started a separate fund ready for the increase.

ZolaBuddy

I'm currently on a fixed DD with So Energy until July. I've been keeping a spreadsheet of my annual usage for both E&G since 2017, and it has been fairly constant at 3100kw/h for electric and 6500kw/h, and I doubt that will change much over the next year or two, probably less in fact.

So Energy have been fairly consistent with their DDs and annual estimates, although I guess they will ramp up their rates very soon. I think I will wait until July to see what they offer both on their website and over the phone, although I think I will drop to SVR.

I have been banking about £250/m since January and will continue to do so for the next few months, and that will be ringfenced for my energy bills whatever I decide to use. But there will be no holidays this year and have cancelled Sky, Netflix and a few other non-essential subscriptions. Leaving me with just the essentials to budget for - council tax, food, fuel, car costs, insurance and of course energy bills.

What worries me is  that my friends seem to be in complete denial about the impending massive shock to the system over the next 12-18 months. Most of them have fixed DDs set up and seem to have little or no interest how much money is leaving their bank accounts.

Joining this site has certainly helped lift some of the fog from my eyes, and I emailed the forum link to my friends, but they find it all "so boring" and "I don't have time" and "who cares"

I suspect there will be a few tantrums and tears in the next few months. 

Peggy0628

Mstty said:

Out of interest have you worked out what you variable payments will be from October with the predicted further 30% rise in the price cap to today's rise? That being the start of the heaviest usage months.

We have and it quite frankly scared us and would ruin half the year if we hadn't come up with a plan and projected our usage and calculated the costs and started a separate fund ready for the increase.

I haven't worked it out at all.
I've only been living on my own for a few months so no real idea what my usage will be like. But when I lived with my ex  (who did not work and was home 24/7 watching tv all day long with the heating on full blast), we always paid our bill quarterly. I managed to pay those bills on single income so I think I'll manage to pay for my own usage even if prices go up. At the moment my winter bill was £70/months (old prices), so even if it's double that by this time next year, it should still be manageable (plus, I'll save money on summer bills).

Chrysalis

I think it is a fair to point out that current fixed DD is not the same as was previously, its going to be subject to its own jumps every 6 months now.

If I bring up variable DD again to people, I will try to remember to point out the risks associated with it.

Marvel1

anotheruser said:

Marvel1 said:

£485 in credit, company goes bust, new supplier, how long do you wait to be refunded or whatever happens?

That's almost irrelevent as the money isn't really yours any more - it's gone.
Took me less than a couple of months.  Yes, a month of being in debt with the new company, then I was in credit again.
Didn't affect how much I paid per month.

So best go variable or prepayment then, what is gone is what you only used.

Ultrasonic

Chrysalis said:

I think it is a fair to point out that current fixed DD is not the same as was previously, its going to be subject to its own jumps every 6 months now.

True, and if cap reviews become more frequent even more so. It should still help to smooth the payments out though, and give customers some guidance of costs.

It's actually a tricky question what appropriate DD payments should be right now. Would it be appropriate for energy companies to set current payment amounts with some consideration to a likely increase in October?

Northern_Wanderer

I calculated my annual energy usage at todays rates to be £153 per month. My balances on gas and electric are about £0 now. I want to change to variable monthly DD on gas and start a savings pot. Should I factor in an extra say 20% now (£30 month) and start saving that, then I will be building up a nice credit into my energy pot for next winter.

Is that going to be enough to keep me warm and the lights on next winter?

wild666

I am of the opinion that energy companies are increasing their prices by more than 54% with them not having to increase the DD's again in October. I have increased my DD by £7 per month, but I have £300 credit on my account. I expect by monthly bill to be around £60 but the DD is £55 I will increase it again in October if I need too. I was with Avro and overestimated my usage by 20%, as I started cutting down my usage when they went under from 196 kWh to 116 kWh for the electric and from 96 kWh to 56kWh per month for gas it means a £300 saving on my bills per year from April