Standing Order to replace Direct Debit

Bigwheels1111

elsien said:

Bigwheels1111 said:

That’s a good idea, easy with electric but my gas meter is in ft3 I think and one unit is about 7 billed units I think.
I give a reading once a month, Pay £75 Direct debit.
Told Octopus to like it or lump it.
Im £149 in credit as of yesterday’s reading and bill.
They called and wanted to up it to £135 a month.
I said ok I will cancel the Direct debit now and you can send me paper bills and I will send you a cheque each month.
Of corse I will forget to sign one of the cheques and forget the stamp on another envelope etc.
Back to the good old days.

I worked out my likely useage with the increased prices going on last years readings. Octopus accepted the lower amount that I suggested. 

You can also not have a direct debit and generate a monthly bill online so you pay exactly what you’ve used. There’s no need to be faffing around with paper bills and cheques. 

Yes I know I’m still on DD as they agreed with me, It just a threat of what I will do.

Rob5342

I can't see what you are gaining really. You are going to have to pay for the energy you use at some point, if you pay less with the standing order than you would with the direct debit you are going to have to put money aside to cover the extra you will have to pay letter. It hardly seems worth the effort for the few pounds of interest you might get

Brie

Zanderman said:

It makes no difference really - you still owe them what you use.

If your DDs take too much then you'll get it back.

A DD that buffers the winter/summer use is sensible, taking more than you actually owe in summer to buffer winter costs. You can always ask for the DD to be altered to a lower figure if you want.

Using SOs instead seems of little value to me, and more hassle, but each to their own. 

I disagree.

Many people are struggling to get companies to agree to sensible amounts.  I've been told by more than 1 firm that they MUST have a minimum of 2 months of what they estimate you will use in a year.  And then only use winter use to calculate the yearly estimate.  Net result is a massive credit by the end of the summer which they are then very reluctant to refund.

A DD is good for budgeting of course.  But a SO that is set at a sensible level will also work well.  All it needs is a quarterly review to ensure the actual amount owed is managable.  I've done this via DD but working it in the same way.  My DD is low according to my provider but I have agreed that I will make an additional payment should the debt increase significantly at an odd time of year.

lsur02

A couple of points in response to comments here.

The point of a standing order is that you still pay what you use but do not pay the frankly opportunistic price hikes which energy companies are trying to impose.  If you revise the amount every few months then you will not be in any arrears.

My company, Bulb, agreed on a reduced monthly payment then hiked it up again after a week, substantially so (54%?!)  They invite customers to change the monthly amount but when you log in there is a limit to how much you can reduce the payment by.  They still want an excessive amount compared to usage.  Their own figures on my statement make that clear.

You can build up credit with a standing order if you wish but not to silly levels.

I see no disadvantage and hope this idea will become more widely considered by consumers.  There is no law which says you must use a direct debit, as far as I am aware.

Daliah

I am waiting for the complaints from people who didn't budget enough when paying by SO, and then find themselves in huge arrears.

A much better way to control your energy costs as much as possible is to reduce the amount of energy you use.

OldMoneySaver

lsur02 said:

The point of a standing order is that you still pay what you use but do not pay the frankly opportunistic price hikes which energy companies are trying to impose.

Eh? You either pay for what you use or you don't - real or perceived cashflow benefits from not building up credit obviously don't affect the price you actually pay.

lsur02 said:

There is no law which says you must use a direct debit, as far as I am aware.

No, but some companies offer advantageous price plans that are conditional on payment by DD, so it can be a money saver.

Zanderman

lsur02 said:

.....

The point of a standing order is that you still pay what you use but do not pay the frankly opportunistic price hikes which energy companies are trying to impose.  If you revise the amount every few months then you will not be in any arrears.....

Increasing the DD to cushion the winter months is not a 'price hike'.

lsur02

Zanderman. a 54% increase in monthly direct debit charges is very definitely a 'price hike'!  This is in additon to attempts at 'fund raising' by Bulb in recent months, asking for a 'top up to boost your credit' despite having over £200 credit already. Not to mention the standing charge, which is also being increased on the quiet. 

Daliah, people do try and reduce their energy use and always have done (closing doors, turning off lights and other commonsense habits.)  There is a limit to how little one can use.  As for 'huge arrears', you set the standing order in line with actual usage so there will not be any arrears.

Thrugelmir

lsur02 said:

The point of a standing order is that you still pay what you use but do not pay the frankly opportunistic price hikes which energy companies are trying to impose. 

The money remains yours, to your credit. A huge number of people struggle to budget in this country. Maths skills aren't the UK's strong point either. I suspect that come the autumn/winter of 2022/23 many people are going to wish they had put money aside. 

OldMoneySaver

lsur02 said:

a 54% increase in monthly direct debit charges is very definitely a 'price hike'!

No it isn't, the price of the energy itself is being increased regardless of how you or they schedule your payments, so increasing DD amounts clearly isn't the same thing as an actual price hike, which involves varying the tariff itself.

lsur02 said:

Not to mention the standing charge, which is also being increased on the quiet.

An increase to the standing charge is indeed a price hike, but of course that applies equally to SO and DD payers.