Energy Monthly Direct Debit Excessive Charge

Stayalert

Hello to all interested people,
Like many I was moved to another energy supplier last September when my previous supplier failed. I was put onto the "Energy Price Cap" tariff and remain on it. No changes were made to my monthly Direct Debit (DD) payments until I received an email in February 2022 telling me that my March 2022 payment would increase by £123 and that I could make a "one of" payment of £245 to reduce my negative balance, which I did. In March 2022, following the "Price Cap" increase announcement, I received another email telling me that the monthly DD payment would increase to £300 in April 2022.  
My new energy supplier very kindly advises me, in each monthly statement, what my estimated annual consumption is. So, I decided to use this information and the charges that would be made for each KWhr of energy that I may use together with the Standing Charge to calculate what my annual costs should be based on the estimated usage and the present charges. 
I challenged my energy supplier about the rather large discrepancy between what I calculated my costs would be and what they wanted me to pay over the next twelve months. It was clear that they were charging for "anticipated" increases in energy prices in October 2022 and adding this into my monthly DD payments. It was also clear that they were not considering the Government Loan that is scheduled for the Autumn of 2022. I requested a review of my monthly payments and, following this review, my monthly payments have been reduced to £235. a saving of £65 per month.
I realise that there may well be another significant price increase later in the year that will only be modified slightly by the Government Loan (£200?) and that the DD will have to increase again in a few months. I also realise that in taking the view that my supplier did over future increases in order for customers to build up a healthy positive balance on their accounts that for many people could assist them in coping with the future increases without too much of a shock. However, I feel that savings at £65 per month over the next six months is much better off in my bank account than in my energy suppliers bank account. I can only imagine the sum of money that will be built up by suppliers who do what mine is doing; and it must be staggering.
I would advise everyone to do the fairly simple calculations that are required to check whether the DD they are paying each month is a fair one and to challenge their supplier if it seems unfair. A word of caution though, make sure that the money you may save will be put aside for future energy bills.

Gerry1

Welcome to the forum.

It's far better to use your actual annual energy consumption derived from actual meter readings, not estimated ones.  The energy companies' estimated annual consumption figures are often wide of the mark.

Paying by Variable Direct Debit also avoids the problems of credit or debit piling up and the associated problems of unexpected catch-up bills and getting a refund after you leave (or if the supplier goes bust).  Of course, you get higher bills in winter and have to plan accordingly, but at least you're always in full control.

Mstty

As said above estimates in no way to judge usage or future usage and costs.

Best to do all calculations on actual readings.

wild666

Stayalert said:

Hello to all interested people,
Like many I was moved to another energy supplier last September when my previous supplier failed. I was put onto the "Energy Price Cap" tariff and remain on it. No changes were made to my monthly Direct Debit (DD) payments until I received an email in February 2022 telling me that my March 2022 payment would increase by £123 and that I could make a "one of" payment of £245 to reduce my negative balance, which I did. In March 2022, following the "Price Cap" increase announcement, I received another email telling me that the monthly DD payment would increase to £300 in April 2022.  
My new energy supplier very kindly advises me, in each monthly statement, what my estimated annual consumption is. So, I decided to use this information and the charges that would be made for each KWhr of energy that I may use together with the Standing Charge to calculate what my annual costs should be based on the estimated usage and the present charges. 
I challenged my energy supplier about the rather large discrepancy between what I calculated my costs would be and what they wanted me to pay over the next twelve months. It was clear that they were charging for "anticipated" increases in energy prices in October 2022 and adding this into my monthly DD payments. It was also clear that they were not considering the Government Loan that is scheduled for the Autumn of 2022. I requested a review of my monthly payments and, following this review, my monthly payments have been reduced to £235. a saving of £65 per month.
I realise that there may well be another significant price increase later in the year that will only be modified slightly by the Government Loan (£200?) and that the DD will have to increase again in a few months. I also realise that in taking the view that my supplier did over future increases in order for customers to build up a healthy positive balance on their accounts that for many people could assist them in coping with the future increases without too much of a shock. However, I feel that savings at £65 per month over the next six months is much better off in my bank account than in my energy suppliers bank account. I can only imagine the sum of money that will be built up by suppliers who do what mine is doing; and it must be staggering.
I would advise everyone to do the fairly simple calculations that are required to check whether the DD they are paying each month is a fair one and to challenge their supplier if it seems unfair. A word of caution though, make sure that the money you may save will be put aside for future energy bills.

I've said a few times, that some suppliers will add a 30% October increase to DD's this April so that the DD is in credit and the company doesn't have to work out a new DD for its customers every 6 months. 
I'm with Octopus and my DD was £48 per month, I was switched to them when Avro went under, since April my usage is more in the region of £60 to £65 per month, I increased the DD to £55 myself but as I have just under £300 credit so maybe the next 12 to 18 months will seriously reduce the credit then I will have to increase the DD again.
I was overpaying the Avro DD by 15% in case of a cold winter but they went under before winter took a hold.