Standing Order to replace Direct Debit

Zanderman

lsur02 said:

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

No it isn't. It's merely getting you (quite sensibly) to, in effect, ringfence some money to cushion the blow of the winter months.

It's still your money, just put aside for those cold days. It's not a price increase (the price is the tariff, not the DD), it's an increase in piggy-banking.

The only price-hike has been the increase in energy costs, which are why you need to budget for when you use more energy later.

You'll pay those costs regardless of how you pay your bills, DD, SO, cheque, etc. 

Jami74

lsur02 said:

I have recently cancelled the direct debit with my energy supplier and set up a standing order 

I did exactly this a couple of years ago with the water company.

They bumped up the direct debit to £60 a month based on their estimate. I took a couple of readings one month apart and realised I was using half of what they were charging. When I phoned up to tell them they were overcharging me they told me I should be paying more and wanted to set up a special payment arrangement of what I could afford, which I declined.

After I hung up, I cancelled the direct debit and set up a standing order for £30 a month. I submitted monthly meter readings for more than a year (and reduced the standing order further because I was still in credit). Now I submit meter readings every 3 months or so just to check that I'm still on track.

The only time it is almost a problem is when they do their six monthly review and send a bill saying to pay x amount by y date. Often that date is a few days before my standing order goes out so I ignore it.

kaMelo

Your water company is different to mine then as I've never had an estimated water reading used for a bill.  All readings are actual readings done by them and a bill generated every six month on exactly what I use. They then average out the last twelve months usage using these figures to calculate the monthly amount for my direct debit which, obviously as it's MSE, is taken from my Santander 123 Lite account which gives 3% cashback on water bills. I'm never more than a few pounds either in credit or debit at any point.

I can honestly say I've never had a problem with any energy company when challenging them over setting, what I consider, an excessive DD. Simply lay out the facts, I use xxxx units at yy pence per unit which equals £zzzz. Multiply the daily standing charge by 365 and add that on, this is roughly what my annual bill will be. Divide that amount by twelve and that's your optimum direct debit amount. Given the facts not one company has ever tried to argue otherwise.  Now I'm on variable DD so pay only for what I use when I use it.
Simply phoning up to complain you think the DD is excessive without any reasons to back those thoughts up are not going to help you very much.

Also, just to add, paying via SO doesn't generate the 2% cashback via Santander that DD's do.

where_are_we

Good point about Santander cashback on utility bills. Recently we had got into arrears with our energy supplier and we nearly paid a lump sum to cover it before realising we would loose the Santander 2% cashback. Instead we negotiated an increase in our DD (qualifying for Santander 2% cashback) to enable us to gradually erode the arrears. In our case a well calculated DD (you also get a discount) is much preferrable to SO`s.

As has been mentioned, Santander pay 3% cashback on water rates making the case for DD being preferrable to SO stronger.

badger09

Thrugelmir said:

lsur02 said:

 A SO means you pay what you choose rather than allow the company to take what they want with a DD.

Do you go into a supermarket for your shopping and at the till only offer to pay for so many ofthe items........

Erm…

My reply would be ‘no, of course not. But nor do I go in the following month and pay for shopping I haven’t bought yet’. 

FWIW I don’t see the point in changing DD to SO.  

Ergates

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.

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.

1)  Changes to DD amounts are not the same as price hikes.  If your DD is higher than your usage (averaged over the year) then the energy company doesn't get to keep the money, it's still your money. 

2) "I see no disadvantage"
"If you revise the amount every few months then you will not be in any arrears."
There's your disadvantage righ there.  If you're paying by SO then the onus is on *you* to constantly monitor your usage vs how much you're paying and make sure you're paying enough, and how much of a buffer you think you'll want/need over the winter.  Bear in mind there is another price rise coming in autumn, so energy companies are (quite sensibly) trying to ensure people have an adequate buffer in place for next winter.

Poquito

lsur02 said:

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.

With standing order being a fixed amount are you overpaying? For example I used to pay by quarterly bill to BG. Given the tariffs are slightly cheaper if you pay by DD, I went with this option as bills are going up. I also opened the Santander account to set the DD’s up from for all utilities to generate cashback. I also have a fixed value DD amount with BG to create a payment reserve. I also give a meter reading and request they Bill my Account every month so the amount I use monthly is actually billed and doesn’t build up (for some reason they are not interested in reconciling accounts monthly, but every 6 months) In these times you have to make your money work for you and i don’t see how SO will help as you have to pay the bills regardless. You can still be in control with DD. 

lsur02

Ergates, I am happy to read the meter and work out what is being used. It is quick and easy to change the SO amount every few weeks or months if usage increases.

I don't believe the company (Bulb) is concerned about my having a buffer for the winter, they are out to raise funds and use the wholesale price increase as an excuse to raise payments as much as they can get away with.

If I want a buffer then I save the money in a bank not with an energy company.  More people should look at the SO idea and stay in control rather than trusting the companies.

Zanderman

lsur02 said:

Ergates, I am happy to read the meter and work out what is being used. It is quick and easy to change the SO amount every few weeks or months if usage increases.

I don't believe the company (Bulb) is concerned about my having a buffer for the winter, they are out to raise funds and use the wholesale price increase as an excuse to raise payments as much as they can get away with.

If I want a buffer then I save the money in a bank not with an energy company.  More people should look at the SO idea and stay in control rather than trusting the companies.

I don't think anyone here will ever persuade you otherwise!

But (and this is my last attempt in this thread) many people will not buffer, and so may well end up with problems in the winter. So for many people an SO is not a good plan. Choosing the DD option is, as far as I'm concerned, me staying in control by me choosing an effective, tried and tested, buffering system.

It's not as if you can do much with the money buffered if you do hold it back until needed. 

It'll only be for a few months (winter spend, worsened by October's price rise is 5 months max away), interest rates are dire, so you'll make nothing on it.  And there's a risk you might spend it!

The energy companies won't make much on it either before it's used to pay your winter bills.

So you really have nothing to lose except a few pence in interest. And everything to gain from peace of mind with no monthly review required. 

born_again

lsur02 said:

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.

Price Hike is the increase in the charges. Not Bulb increasing the DD to cover the price increases on the gas/electric you will use.

Don't know where you get "on the quiet" from. As it was clearly displayed in the Cap increase advice.
Yes. it's a con to double the standing charge. For exactly the same service. But it is what it is.