MSE News: 30% of British Gas, Octopus & Shell Energy customers say their direct debits have DOUBLED 9 May 2022 at 11:13AM in Energy 66 replies 3.8K views

MSE_Petar

At least 30% of British Gas, Octopus Energy and Shell Energy customers who were in credit and on price-capped tariffs told the UK’s biggest consumer website, MoneySavingExpert.com (MSE), that they've seen their direct debits double – even though the price cap rise is half that, at 54%. Across all firms, 25% of customers in this situation reported direct debits doubling or more.

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'30% of British Gas, Octopus & Shell Energy customers say their direct debits have DOUBLED'

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fan46vale

I am with Shell Energy - I am all electric so my usage is very high so i was already paying £227.00 per month. The e-mail from Shell last week told me it was increasing to £486.00 per month from next month!!! Even when i logged on the lowest i could get it down to was £340.00  which is still far too high. As it is the summer months i use far less at the moment. What really annoyed me was i wasn't in arrears either!!! Could understand it if I was. Anyway I called in the end and had a very sensible conversation with the agent who suggested £250.00 per month which i have agreed to . I would suggest with Shell you call to discuss what you can afford.  

CharlesStuart

What I can’t understand is why the standing charge has almost doubled, one suggestion I received was that the companies were coverin* the costs of supporting the failed suppliers, any ideas?

bbungay

I am obviously doing something wrong, everywhere I look shows a price cap increase of £693 from £1,277 to £1,971 per year, but mine has increased to £3000 per year. I understand it's the daily and unit rates that are capped rather than my annual spend, so where can I find them to check against the ones Scottish Power are using?

Sea_Shell

fan46vale said:

I am with Shell Energy - I am all electric so my usage is very high so i was already paying £227.00 per month. The e-mail from Shell last week told me it was increasing to £486.00 per month from next month!!! Even when i logged on the lowest i could get it down to was £340.00  which is still far too high. As it is the summer months i use far less at the moment. What really annoyed me was i wasn't in arrears either!!! Could understand it if I was. Anyway I called in the end and had a very sensible conversation with the agent who suggested £250.00 per month which i have agreed to . I would suggest with Shell you call to discuss what you can afford.  

@fan46vale


Was their original requested figure of £486 based on your historic actual annual usage, or guestimates?

Do you know what your annual cost would be based on the current cap prices? (nothwithstanding the Oct cap)


Is it nearer £3000 or £5800??

TheMilkmansDad

CharlesStuart said:

What I can’t understand is why the standing charge has almost doubled, one suggestion I received was that the companies were coverin* the costs of supporting the failed suppliers, any ideas?

there's a sticky thread at the top of the energy board explaining the Standing charge increase

MattMattMattUK

CharlesStuart said:

What I can’t understand is why the standing charge has almost doubled, one suggestion I received was that the companies were coverin* the costs of supporting the failed suppliers, any ideas?

Largely due to the costs of SoLR, also due to inflationary pressures and in Scotland there was significant storm damage. This has been covered multiple times, as well as on the sticky at the top of the forum.

MattMattMattUK

MSE_Petar said:

At least 30% of British Gas, Octopus Energy and Shell Energy customers who were in credit and on price-capped tariffs told the UK’s biggest consumer website, MoneySavingExpert.com (MSE), that they've seen their direct debits double – even though the price cap rise is half that, at 54%. Across all firms, 25% of customers in this situation reported direct debits doubling or more.

Read the full story:
'30% of British Gas, Octopus & Shell Energy customers say their direct debits have DOUBLED'

If you haven’t already, join the forum to reply.

This ignores the fact that the price cap rose 54% in April, after a significant rise in October 2021 and a further expected significant rise in October 2022. I would really expect better of MSE than to spread this as something the energy companies are doing, without wider context and covering the reality of the situation. 

Anyone coming off a fix onto the post-April SVR will see their unit rates double or more, factoring in the predicted October rise it is entirely reasonable for Direct Debits to more than double. 

pochase

fan46vale said:

I am with Shell Energy - I am all electric so my usage is very high so i was already paying £227.00 per month. The e-mail from Shell last week told me it was increasing to £486.00 per month from next month!!! Even when i logged on the lowest i could get it down to was £340.00  which is still far too high. As it is the summer months i use far less at the moment. What really annoyed me was i wasn't in arrears either!!! Could understand it if I was. Anyway I called in the end and had a very sensible conversation with the agent who suggested £250.00 per month which i have agreed to . I would suggest with Shell you call to discuss what you can afford.  

Unfortunately it is not about what you can afford, but what is required over next 12 months to cover the same amount of electricity you used in the last 12 months.

Assuming that you are not on a fixed tariff but on SVT, the increase for electricity is at least 30%, so if you don't have a huge credit accumulated the 10% increase will be sufficient during the summer months, but you will not have sufficient credit to cover winter without a big increase of your direct debit.

Without knowing your energy use, just from above figures the £486 is definitely to high, but the £340 sound sensible. 

Going from an increase of 30% and no changes to your energy use your current 12*227=£2726 energy cost will go up to £3541. Lets say you use 1/3 in the 6 month of summer, and second half there will be at current estimates at least another 10% increase on electricity cost.10% of 2/3 of £3541 = £236. So the estimated cost for the next year might be as high as £3777.

With your new DD of £250 you have paid £1500 for the first 6 months, leaving you £2277 for the rest of the year, deduct the £200 credit you will receive in autumn, that leaves you with £2077 or £346 that you would need to pay for the remaining 6 months. Under this scenario a direct debit of £298 would sound about right.

All the above calculations is just based on some guestimate, especially about the October increase and how your pattern for the first/second half of the years is or how much credit you have, but it shows that with £250 you will not be able to pay for the next year, and you will end up with debt. If you were coming of a fixed tariff the whole situation changes and even the £480 might be completely correct.

Conclusion
The direct debit amount they were asking you for is definitely to high if you were already on SVT and you did the right thing to call them out on it, but the £340 they would have you allowed to on their web site is nearer to reality. The £250 is not enough to cover your use if you don't reduce your energy consumption and hopefully they made you aware that you might end in quite a bit of debt. £600 by the guestimate above.

Try to reduce your energy use as much as possible and/or put some additional money aside and you should still be fine.

Edit
Corrected the October increase to 10% as the electricity estimation is currently 13%

wild666

What I've being saying to people who have said they are having their DD's increased is look at whatever you leave in standby mode and start turning it off at the wall socket, as many people don't have the latest energy efficient appliances this could save them a couple of hundred pounds per year and with gas look at turning down the temperatures on the boiler to 50 degrees for water and 55 degrees for heating and start lowering the thermostat by one degree every week until they start to feel slightly cold.
At first they won't notice the decrease on the thermostat but might as they decrease it to 19 or 18 degrees.

Meter_Tech

Customers are 'enticed' into DDs by having discounts offered to their bills. The advantage is spreading the cost for you energy bill but presents challenges where increases are applied 'out of your direct control'. Furthermore, should your Supplier fail any accumulated credit is tied up for at least 6 months while the failed Suppliers affairs are sorted out. Is it time the DD discount is given regardless of payment method and people take control of their finances through standing orders?