Should quoting costs to customers as a monthly direct debit amount be stopped?

Chrysalis

rp1974 said:

Dont see the quoting of monthly amounts as an issue,the almost complete disregard for actual unit and standing charges that apply to you,not an average consumer however clearly is.
The majority of the information needed to make your own choices is readily available,the abilty to understand it seemingly not as readily available.
The price cap nonsense,however well intentioned I find it incredible,almost impossible to believe that many,many people think the price cap is a maximum possible payment amount,not that it is a maximum possible unit and standing charge price.

So you think millions of people not understanding energy billing is a problem that only applies to me? Just want to clarify if thats what you saying.

[Deleted User]

I dont have a problem with being given a quote as energy companies base it on the usage the year before. What does annoy me is they over estimate!! This year the over estimation has been beyond ridiculous, I did complain about my d/d estimate, which jumped from £57 to £129 a month and I got it back down to £81. We are paying in advance for something we are not using! Edf would not allow me to change my method of payment as I wanted to pay a quartely bill as they no longer bill quartely. Its 6month billing, which should be changed as it makes it too easy to get into debt!  I have in the past paid extra on the energies website during the winter months to ensure I dont get into arrears. I have also cut down on my usage from last year, with the drastic price increase I am more aware of what electricity I am using.

There is a fuel poverty in this country and it needs to be addressed!  the fuel allowance for the over 60s should be means tested and taken away from those who dont need it! Its not just the elderly that need fuel theres families that are really struggling! It needs to be a fairer system for all. I know of over 60s who use theirr heating allowance money to go towards their winter holiday! 

badmemory

I think it is time they stopped charging gas per kw & just charged per unit.  I have found it interesting that recently as gas has been going up the number of kw per units has gone up, not down like you would expect, in fact I don't remember it ever having been so high.  British Gas has just done 39.8 for the whole 3.5 months of my recent bill.  The highest I can remember it for the last almost 10 years is 39.6 with it normally being nearer 39.3.

As for Ofgem, how much would it save us all if we didn't have to pay for that useless quango.

rp1974

Chrysalis said:

rp1974 said:

Dont see the quoting of monthly amounts as an issue,the almost complete disregard for actual unit and standing charges that apply to you,not an average consumer however clearly is.
The majority of the information needed to make your own choices is readily available,the abilty to understand it seemingly not as readily available.
The price cap nonsense,however well intentioned I find it incredible,almost impossible to believe that many,many people think the price cap is a maximum possible payment amount,not that it is a maximum possible unit and standing charge price.

So you think millions of people not understanding energy billing is a problem that only applies to me? Just want to clarify if thats what you saying.

No,absolutely not.
The you was intended as a general reference to whomever themselves,not a particular specific to you personally one.

[Deleted User]

badmemory said:

As for Ofgem, how much would it save us all if we didn't have to pay for that useless quango.

That useless quango is a non-ministerial Government Department within BEIS. The Government could do away with Ofgem tomorrow but some part of Government would have to take over Ofgem’s work - most of which is industry-related. Changing a name might make people believe that there has been change but, in my experience, the same people end up doing the work.

For example, the organisation that runs the rail network used to be called Railtrack; it is now called Network Rail and it is soon to become Great BRITISH Railways.

Chrysalis

Deleted_User said:

I dont have a problem with being given a quote as energy companies base it on the usage the year before. What does annoy me is they over estimate!! This year the over estimation has been beyond ridiculous, I did complain about my d/d estimate, which jumped from £57 to £129 a month and I got it back down to £81. We are paying in advance for something we are not using! Edf would not allow me to change my method of payment as I wanted to pay a quartely bill as they no longer bill quartely. Its 6month billing, which should be changed as it makes it too easy to get into debt!  I have in the past paid extra on the energies website during the winter months to ensure I dont get into arrears. I have also cut down on my usage from last year, with the drastic price increase I am more aware of what electricity I am using.

There is a fuel poverty in this country and it needs to be addressed!  the fuel allowance for the over 60s should be means tested and taken away from those who dont need it! Its not just the elderly that need fuel theres families that are really struggling! It needs to be a fairer system for all. I know of over 60s who use theirr heating allowance money to go towards their winter holiday! 

Well Martin is raising it to parliament about DD's been set higher than quoted annual cost.  In terms of the actual quoted annual usage been too high then I think you would have to raise it with your supplier, point out its reasonable to base on the previous year's usage.  If they still dont budge, then you have three options, either try to reduce the DD yourself on your account (if they let you), fix to variable DD which means you only pay for what your usage is in arrears (bear in mind if you dont send readings, it would match their estimated reading which might be inflated or too low), or change supplier.

wild666

Deleted_User said:

I dont have a problem with being given a quote as energy companies base it on the usage the year before. What does annoy me is they over estimate!! This year the over estimation has been beyond ridiculous, I did complain about my d/d estimate, which jumped from £57 to £129 a month and I got it back down to £81. We are paying in advance for something we are not using! Edf would not allow me to change my method of payment as I wanted to pay a quartely bill as they no longer bill quartely. Its 6month billing, which should be changed as it makes it too easy to get into debt!  I have in the past paid extra on the energies website during the winter months to ensure I dont get into arrears. I have also cut down on my usage from last year, with the drastic price increase I am more aware of what electricity I am using.

There is a fuel poverty in this country and it needs to be addressed!  the fuel allowance for the over 60s should be means tested and taken away from those who dont need it! Its not just the elderly that need fuel theres families that are really struggling! It needs to be a fairer system for all. I know of over 60s who use theirr heating allowance money to go towards their winter holiday! 

I wouldn't put it past suppliers to be adding at least 30% to the April increase of 54%. In your case they wanted to increase the DD by just over 126.3%. This could mean they were assuming that the prices would go up by just over 26% in October and they wouldn't have to increase your DD until at least next April. This could mean you built up a credit of around £300 by October and it might decrease by next April.

BooJewels

badmemory said:

I think it is time they stopped charging gas per kw & just charged per unit.  I have found it interesting that recently as gas has been going up the number of kw per units has gone up, not down like you would expect, in fact I don't remember it ever having been so high.  British Gas has just done 39.8 for the whole 3.5 months of my recent bill.  The highest I can remember it for the last almost 10 years is 39.6 with it normally being nearer 39.3.

As for Ofgem, how much would it save us all if we didn't have to pay for that useless quango.

You've actually just proved exactly why they need to do it the way that they do. 

The 39.8 or whatever is the calorific value of the gas, not the kWh in a unit.  That is how much energy that particular batch of gas provides and is centrally agreed upon for a period of time and is used to calculate how much energy your 'unit' of gas generates.  Gas is a natural product that varies a little, so this needs to be accounted for in the pricing.   In reality, if you have a metric meter that measures in cubic metres, it roughly generates about 11.28kWh of energy per m³.  Not 39.8.  If the calorific value increases, you actually get more energy generated from your 'unit' of gas than if it decreases - therefore costing you a smidge less for the same amount of energy benefit - your heating may be on for a few minutes longer per unit etc..  Not sure that the public would be keen on the 'unit' price of 79p.

In respect of the OP, the issue that is causing the most distress for people is the [mis]understanding of the work 'fix' or 'fixed'.  They think they sign up to a fixed tariff, their DD is set at £65 / month and think that's the bit that's fixed.  Not that the kWh price is fixed and the DD is only a best guess at their average monthly spend at that price - and can change.  Maybe now that more people are on variable tariffs, this concept will be eroded and more people will be forced to take ownership of their energy use and will need to learn and understand how it works that bit better.

Mstty

For me all quotes and deals either online/post and agreed over the phone (the most riskiest of ways to do a deal) by law have always been followed up with details of the deal including SC and rates per kWh.

There is also the 14 day cooling off period to change your mind.

All of the above just means like everything else you do a deal on, check the paperwork and back out if it's not right.

BUFF

Chrysalis said:

BUFF said:

Chrysalis said:

  In an ideal world fixed DD would suffer a death 

I disagree with this as I probably use 70% of my gas over 3 months in the Winter & it suits me to average the payment over 12.
I also suspect that those people who are budgeting/spending close to their limits on a day by day basis are probably the ones who would be worst hit by having to pay for their increased heating cost at the time incurred rather than spreading the load over a longer period.

But they still pay for it, just in advance instead in summer.  Fixed DD is not a discount,  This actually hurts the poor the most, as the money they lose from paying in advance is proportionally higher for them, I think you meant its bad for those who dont know how to budget in advance, my better solution is below fixed DD in arrears, but still dont advertise as a DD, advertise as unit rates and SC.

I would be more ok with fixed DD in arrears, this satisfies those who are obsessed with fixed DD, whilst not allowing the companies to treat customers as a 0% loan supplier.  So basically an account would never be allowed to be in credit for long (like on credit cards), it would be in debit in winter, and catch up in summer.

Well, I guess that it's a bit of both. Yes, it isn't a discount but nor does it cost extra. No, I meant what I said. If you take as an example an account like my gas that varies wildly (& I am a lowish user) you are swinging from something like £10 (mostly SC) per month during summer to £100/month in January or February. I am able to pay & budget ahead for that, however, it's easier to budget with a constant or near constant baseline for expenditure & it doesn't cost you any more to do so. People living close to their daily/weekly/monthly budget may be able to put aside an extra £10/week  towards bills in summer but not £25. If they may have to borrow (e.g. Christmas?) they incur charges/interest which increases their debt > vicious circle. Obviously a lot of people in that situation may be on prepay rather than DD but then they end up paying higher rates which isn't good either.

I can't see too many companies agreeing to the majority of their customers being in arrears unless they got to charge higher prices to allow for it - they don't want to be a 0% loan supplier either (& that is before defaulting accounts).

p.s. I am not obsessed with fixed DD (I could equally say that you are obsessed with variable DD) but I do think that people should have the option to choose whichever suits their needs/wishes best.