Why in UK the DD amount is constant figure?

Ultrasonic

oliverbrown said:

Ultrasonic said:

You point was about stopping it being the default and many have stated they think it should stay as it is (including me).

But most of the arguments were to say that they personally prefer FMDD, and not giving any real justification as to why FMDD should be the default.

I'm sure I did but I'll state it again: the FMDD is of most value for those who will struggle to pay and who if the payments are not uniformly spread across the year could be utterly unable to cope with large winter bills. By contrast VMDD being an option makes far more sense to me since it allows those who are confident they know they can manage this to make an informed choice to switch to it.

oliverbrown

Ultrasonic said:

By contrast VMDD being an option makes far more sense to me since it allows those who are confident they know they can manage this to make an informed choice to switch to it.

By contrast FMDD being an option makes far more sense to me since it allows those who are confident they can monitor and challenge over-inflated direct debits can make an informed choice to switch to it.

Thrugelmir

oliverbrown said:

Ultrasonic said:

You point was about stopping it being the default and many have stated they think it should stay as it is (including me).

But most of the arguments were to say that they personally prefer FMDD, and not giving any real justification as to why FMDD should be the default.

Why don't people pay their car and property insurances annually rather than monthly?  As would save them a lot of interest.  Buy now pay later is great for finance companies. 

Ultrasonic

oliverbrown said:

Ultrasonic said:

By contrast VMDD being an option makes far more sense to me since it allows those who are confident they know they can manage this to make an informed choice to switch to it.

By contrast FMDD being an option makes far more sense to me since it allows those who are confident they can monitor and challenge over-inflated direct debits can make an informed choice to switch to it.

Like many situations, I believe it's important to prioritise the most vulnerable / most likely to get into financial difficulty. The current default does this for the reason I explained above. It is only for this group that the default matters, as those who are confident they know what they're doing will also be perfectly capable of opting for their chosen alternative. 

oliverbrown

Thrugelmir said:

Why don't people pay their car and property insurances annually rather than monthly?  As would save them a lot of interest.

False analogy. The cost of car and property insurance are known in advance, and so the monthly direct debit is not an estimate.

oliverbrown

Ultrasonic said:

Like many situations, I believe it's important to prioritise the most vulnerable / most likely to get into financial difficulty.

And overinflated direct debits have no effect on the financial affairs of people in financial difficulty?

Ultrasonic

Thrugelmir said:

Why don't people pay their car and property insurances annually rather than monthly?

Many do, including me. For some it is more affordable to split the cost across the year though.

Thrugelmir

oliverbrown said:

Thrugelmir said:

Why don't people pay their car and property insurances annually rather than monthly?  As would save them a lot of interest.

False analogy. The cost of car and property insurance are known in advance, and so the monthly direct debit is not an estimate.

Nothing to with anologies. It's the ability to budget and managing ones finances.  Another example is vehicle road tax  which has monthly, half yearly and annual payment options. People opt for monthly as it spreads the load. Often there's a lack of savings as well. A winter lighting and heating bill for many people was a major expense. Even before the recent increase in prices. 

Ultrasonic

oliverbrown said:

Ultrasonic said:

Like many situations, I believe it's important to prioritise the most vulnerable / most likely to get into financial difficulty.

And overinflated direct debits have no effect on the financial affairs of people in financial difficulty?

Of course they do and, as I wrote in my original reply to you in this thread, this is what should be addressed rather than changing the default payment method.

oliverbrown

@Thrugelmir and in none of those scenarios does the provider set the direct debit according to how much they allegedly think the customer is going to use, incentivising them to overestimate.