Why in UK the DD amount is constant figure?

BUFF

Chrysalis said:

I have observed its the same few active posters that are actively against Variable DD.

They play the case that it will break all the poor people with assumptions that poor people dont know how to budget.

I do wonder if  the real problem with Variable DD is they dont like the fact you pay for energy "after you use it".

One could equally say that it is the same few active posters that are actively against Fixed Direct Debit ...
Me personally, I am for being given the choice & for my usage etc. it suits me under the current system to go FDD & there is no penalty for so doing. But if you want to pay by VDD I am fine with that.

Why would one have a problem with paying for it after you use it versus currently paying for it ahead? If the energy suppliers gave one the choice of FDD but after use (as opposed to paying 1 month in advance)  I would be in hog heaven ... I don't think that the energy companies would like it though.

BUFF

Gerry1 said:

Some energy companies collect DDs monthly but bill only six monthly, and that must be the worst of all worlds, e.g. when the April bill reveals that winter usage has been far higher than expected, the fixed-but-not-fixed DD must rocket and it's far too late to turn down the thermostat.  That practice needs to be stamped out immediately.

I would say that it's the fact that they only do reviews on a 6 monthly basis combined with confusing/uninformative statements in the interim if you are lucky (I am looking at you BG & EDF ) ...
I keep on top of tracking my energy use/cost  & I dislike it [indeed when the time is right I will move to suppliers that do proper monthly statements (all other things being equal)]. For those that don't do at least monthly reads, keep track & keep up with the energy market it must come as a real shock.

Ultrasonic

Chrysalis said:

I have observed its the same few active posters that are actively against Variable DD.

They play the case that it will break all the poor people with assumptions that poor people dont know how to budget.

Remember we're talking about the default payment method. This only matters to those who don't consider changing it, and of those who don't it is by definition those most unable to cope with high bills who could have an issue with VMDD. Nobody is suggesting that all 'poor people' will be in more trouble if switched to VMDD but rather people are just thinking of those that will.

Thrugelmir

Chrysalis said:

molerat said:

Section62 said:

Chrysalis said:

Would we be having all these looking for excuses if someone was proposing a fixed DD over variable?

Nobody is "looking for excuses".  It is a fact that some people prefer to pay bills via a fixed monthly DD, even where the ultimate cost to them is greater than if they opted to pay variable amounts instead.

How is the cost ultimately more ?  You only pay for the energy you consume, it is not like my mobile contract where I pay for a certain amount of minutes and data whether I use them or not.  As long as the monthly payment is an accurate reflection of 1/12th EAC then there is no problem whether the account is carrying a credit or debit balance.  The least educated are often the poorest and least able to budget.  Paying an actual use of £100 for 8 months then being hit with bills of £400 for the 4 winter months would throw them into a crisis whereas 12 months at £200 is easier to cope with.  I wonder how big this overcharging really is as many of the complaint posts seen on here do not hold up to scrutiny, personally I have never had the problem. Any slight over estimation of EAC is now greatly magnified due to energy prices.  I could complain that my DD has gone up from £82 to £210 but I won't as that is an accurate reflection of 1/12th EAC based on the tariffs in force at the time.  Also for me I get 2% cashback for my energy DD but it is capped.  Actual bill payment would breach that cap so would actually cost me more.

FMDD is not the problem, in fact it is a lifesaver for many. It is the calculation of that payment and regulations on how that money is held that is.  Most of the problems are, IMO, down to weak regulation.

1 - Martin noticed the problem and said he would raise it with parliament.

Octopus's own data totally disagrees somewhat with MSE's straw poll of users. Always best to obtain hard facts before standing on a soap box and shouting. 

Chrysalis

In todays BBC article Ofgem said they are "reviewing if fixed DD is been abused and will fine if they find it is"

So their statement is less aggressive than the business secretary who gave the impression it had already been determined it was been abused.

https://www.bbc.co.uk/news/business-61462584

Chrysalis

Thrugelmir said:

Octopus's own data totally disagrees somewhat with MSE's straw poll of users. Always best to obtain hard facts before standing on a soap box and shouting. 

What is Octopus's own data, for reference I should point out a majority of the reports I seen with excessive DD's before April were Octopus customers.

I posted my own figures on here in bold last night and I am a coop customer managed by Octopus. (strange arrangement between the two companies).

I can repeat it here.

18 day bill based on actual not estimated usage, data from smart meter, for electric and gas £30.
Monthly direct debit set to £95.90 (as of today) to cover these current bills.
My bill estimates my annual Electric cost to be a whopping £3800 and another £160 for gas

So I have an extremely over inflated electric cost estimate, and a direct debit that bears no relevance to either the estimate or my actual usage.  My winter usage is only about 10% higher than summer, which I think throws off their algorithms (I suspect these algorithms assume much higher winter usage vs summer for everyone, and those who use less than expected in winter end up overpaying),  Finally I was £900 in credit last winter.

agentcain

pochase said:

The high standing charge is not an insurance to protect customer credits, it is to pay back the costs of those credits for the suppliers that went bust already last year, along with other SOLR costs.

So  your idea will not reduce the standing charge by a single penny.

What? I didn't talk of insurances.
If these sums were deposited on protected accounts and not with the companies own accounts, no credit would be lost so no cost would incur. 

agentcain

GunJack said:

agentcain said:

 and at the end of the year or even better on April, after winter's done, any balance could be returned in whole automatically.

Why?? If I am staying with the same supplier, why would I want my credit balance returned? I personally like having a credit balance to allow for unexpected consumption, supplier going under, or any other reason I can think of.

I have to go through this every 6 months when my water company produce a bill - reduce DD to stupid level automatically just because  I have a credit balance. I have to phone them just after every bill is produced to reinstate my DD to what I want it to be, and it's a right nause having to do that.

Stop trying to penalise those of us who run our accounts just fine...

There can be always the choice for you not to receive the refund. If you want to keep your supplier well funded that's your choice.
I would argue that those who can pay exactly what they owe are more able than people like yourself who rely on buffers to pay their expenses.

How's the extra balance help you in any way with the supplier going under? 

Thrugelmir

Chrysalis said:

Thrugelmir said:

Octopus's own data totally disagrees somewhat with MSE's straw poll of users. Always best to obtain hard facts before standing on a soap box and shouting. 

What is Octopus's own data, for reference I should point out a majority of the reports I seen with excessive DD's before April were Octopus customers.

Are you accusing Octopus of lying ?  

Section62

agentcain said:

If these sums were deposited on protected accounts and not with the companies own accounts, no credit would be lost so no cost would incur. 

There would need to be entities put in place to hold these sums, and auditing of the arrangements, and additional transaction costs moving money between the different accounts.

So there would be a non-zero cost attached to the idea of ringfencing customer credit.