Why in UK the DD amount is constant figure?

theoretica

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?

How common are these overinflated DDs in reality?  Mine has always been around right - my annual usage in kWh at whatever my current tariff is.  Simple enough, though this simplicity may be because I have had fairly stable energy use and this year looks much like last year. No household members moving in and out or moving home or anything like that. Rather than trying to get rid of both the disadvantages and advantages of the fixed DD why not just aim to tackle the disadvantages and any overinflation of DDs.  Controlling how much credit can be built up, or more clarity of how the DD is calculated and highlighting how your use compares to the predicted usage.

oliverbrown

Ultrasonic said:

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.

Address it by getting Ofgem to monitor the FMDD amounts of millions of customers? Good luck with that.

Thrugelmir

oliverbrown said:

@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.

Better to focus on the bigger macro picture than jump on an ill informed hobby horse fuelled by social media speculation and idle journalism.  

oliverbrown

Thrugelmir said:

Better to focus on the bigger macro picture than jump on an ill informed hobby horse fuelled by social media speculation and idle journalism.  

Says someone who completely ignores the wholesale abuse of inflated direct debits which was creamed off to directors for years and that we are all now paying for.

t0rt0ise

oliverbrown said:

Thrugelmir said:

Better to focus on the bigger macro picture than jump on an ill informed hobby horse fuelled by social media speculation and idle journalism.  

Says someone who completely ignores the wholesale abuse of inflated direct debits which was creamed off to directors for years and that we are all now paying for.

Exactly so. And everyone builds up credit in the summer, company goes bust, and we all have to pay for the credit to be repaid.

Ultrasonic

oliverbrown said:

Ultrasonic said:

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.

Address it by getting Ofgem to monitor the FMDD amounts of millions of customers? Good luck with that.

I haven't actually said anything about how exactly this should be addressed but in the first instance let's see how the energy firms respond to the recent OFGEM compliance reviews relating to this.

Even if nothing changes I'm unconvinced that your 'solution' wouldn't be worse than the current problem though. VMDD is guaranteed to give much lower bills over warmer months and higher bills over colder months, as opposed to the issue of overly high estimated DD amounts affecting some people. Even those who do overpay will ultimately be OK on the energy front as if/when the customer struggles to pay and the account is properly reviewed then it should be resolved. Which is not to say there isn't still an issue of what a customer may have previously gone without to pay the higher amounts, or the stress of doing so.

BikingBud

This is not new:

https://forums.moneysavingexpert.com/discussion/5731366/npower-absurd-dd-estimation/p1

BikingBud

Gerry1 said:

Back in the days of the Electricity and Gas Boards your meter was read by a meter reader and you were sent a quarterly bill.  You probably paid it at the Electricity and Gas Board shops in the High Street.  There was no choice of supplier and no such thing as dual fuel. And that was that.  You even had to buy your gas cooker from the Gas Board.

Privatisation / liberalisation meant that you had a choice of supplier, the high street shops disappeared and payment became remote and Direct Debits were promoted to save costs.  Uniquely, fixed DDs became the norm: Variable DDs were offered by some but not all suppliers, and they were seldom promoted, the default was always Fixed DD.

Originally the idea was that sometimes you would be in credit and sometimes you would be in debit, but Fixed DDs soon became a cash cow.  Many smaller companies used Fixed DDs to finance their business growth, sometimes even even taking the first payment before commencement of supply.  Dozy Ofgem turned a blind eye, and the bubble burst when 30 companies went bust in little more than a year.  Citizens Advice were highly critical of Ofgem's inaction, as was the recent report than Ofgem commissioned.

IIRC Variable DDs are offered by many of the remaining suppliers, including British Gas, Shell Energy, E.On, EDF, SO Energy, SSE, Octopus and Ecotricity, probably Scottish Power, but apparently not E.On Next.

The price we pay for "choice"

How much is it really costing us? I know its a few years old but tell me how it has improved.

More recent

And another

Perhaps even Mr Sunak has now realised

Critical services to support basic living, eg water, power etc, should not be provided by profit making organisations, especially not those owned by foreign governments.

Let's return to closely regulated, potentially even nationalised, suppliers working with Smart meters to get accurate readings and bills that enables people to understand and plan for their expenditure. 

Then reinvesting money, rather than being disbursed as obscene profits to shareholders, into improvements to the infrastructure including transition to more sustainable and diverse energy provision, we learnt in the 70, (blackouts) about issues with over reliance on a single power source.

Privatisation or Nationalisation Taxpayer always pays

Section62

BikingBud said:

Then reinvesting money, rather than being disbursed as obscene profits to shareholders, into improvements to the infrastructure including transition to more sustainable and diverse energy provision, we learnt in the 70, (blackouts) about issues with over reliance on a single power source.

Wasn't that due to strikes within the (nationalised) industries that we relied on to suppy our energy?  (electricity, gas, coal, railways etc)

It wasn't so long ago ISTR that people were complaining about the overcharging and poor service offered by the 'Big 6'. E.g. -

https://www.independent.co.uk/news/business/news/big-six-energy-companies-overcharging-loyal-customers-by-up-to-ps234-a-year-says-watchdog-10053050.html

So it isn't obvious that reverting to larger companies or monopolies is the answer.  The fundamental issue appears to be with the regulation of the industry, and getting the balance right between cheap energy, reliable energy, and 'green' energy.

More sustainable and diverse energy supplies delivered by nationalised companies won't necessarily mean cheaper bills.  So what do people really want?

wild666

oliverbrown said:

Mstty said:

By educating people to talk in kWh and not monthly amounts is the only way. @oliverbrown

Only when armed with kWh usage can you reasonably discuss and set rates with energy suppliers.

The reality is, the vast majority of people are not going to analyse their energy bills and usage to the degree we do here. Banking on that principle as a solution is not a viable way to prevent energy suppliers from industrial overinflation of monthly direct debits.

I analyse  my monthly bills with scrutiny, I know my electric SC is  £15.08 per month and the gas SC is £8.44 per month and my monthly usage is between 116 kWh and 126 kWh per month for electric and the gas is around 15kWh in summer and around 150 kWh per month in winter. 
That's because I turned down the temperature on the boiler to 53 degrees for heating plus I use the light emitted by my monitor screen in the winter months. So far my monthly DD is £55 but the cost is nearer £65 per month but I'm using the credit I have from Avro to pay less, when the credit is nearly used up I will then increase the DD again.