Difference between paying by direct debit and on receipt of bill

Gerry1

Here's a typical tariff.

EDF Deemed Tariff

Look at the Cash/Cheque figures for your region and do the sums.  Most other suppiers' SVTs will be virtually identical, although E7 electricity rates vary a bit more.

However, Octopus don't charge extra. so that's your answer, although you'll have to phone them.  You need the Flexible Octopus tariff.

Alnat1

People who opt for variable DD seem to get the money taken around 2 weeks after the bill is produced. Is this not long enough for you to check that your bill is correct?

You say you need control but I don't understand what you think you can control. Are you saying if you don't like the amount of the bill you will pay a different amount? Because life doesn't work like that.

Olinda99

Well it's not purely just because they can - there are genuine additional admin costs for them.

In any case, it always used to be not that you pay more if you don't pay by DD  but that paying by DD gives you a discount.

ie the higher (pay on receipt of bill) price is the standard normal price but if you pay by DD you get a discount.

Sarahboo1912

Gerry1 said:

Here's a typical tariff.

Look at the Cash/Cheque figures for your region and do the sums.  Most other suppiers' SVTs will be virtually identical, although E7 electricity rates vary a bit more.

However, Octopus don’t charge extra so that's your answer, although you'll have to phone them.  You need the Flexible Octopus tariff.

Thanks this was helpful. The difference in rates for different payment methods is less with EDF than it is with Shell.

I’ve requested a quote from Octopus who do seem to offer what I’m looking for so thank you to those who have pointed me in the right direction.

Sarahboo1912

Alnat1 said:

People who opt for variable DD seem to get the money taken around 2 weeks after the bill is produced. Is this not long enough for you to check that your bill is correct?

You say you need control but I don't understand what you think you can control. Are you saying if you don't like the amount of the bill you will pay a different amount? Because life doesn't work like that.

As stated before, I work in accounts receivable- so am perfectly aware how billing works thank you.  

matelodave

Olinda99 said:

Well it's not purely just because they can - there are genuine additional admin costs for them.

In any case, it always used to be not that you pay more if you don't pay by DD  but that paying by DD gives you a discount.

ie the higher (pay on receipt of bill) price is the standard normal price but if you pay by DD you get a discount.

At last someone has said it. You don't pay more if you don't pay by DD but you get a discount if you do because it reduces the cost of collection and processing.

Not only that if you play it right you can end up with an interest free loan - my leccy consumption exceeds my DD payment for around five months of the year and is less for around 7 months which balances out nicely to zero after twelve months.

TBH it's a bit like saying the government has given you some money when they reduce taxes. However,  in reality they are just taking a bit less - it's how you perceive stuff.

agentcain

matelodave said:

Olinda99 said:

Well it's not purely just because they can - there are genuine additional admin costs for them.

In any case, it always used to be not that you pay more if you don't pay by DD  but that paying by DD gives you a discount.

ie the higher (pay on receipt of bill) price is the standard normal price but if you pay by DD you get a discount.

At last someone has said it. You don't  pay more if you don't pay by DD but you get a discount for paying by DD because it reduces the cost of collection and processing.

DD payments have been rising since 2009 https://www.statista.com/statistics/443341/direct-debit-payment-in-the-united-kingdom/
Assuming the likelihood that this DD payment trend correlates well with energy DD payments, since most people need to pay this compared to e.g. monthly car insurance or mortgage, that means the energy suppliers have been decreasing their operational cost when it comes to non-DD payments. 
This should lead to unit cost reductions, which I doubt we ever saw, either on DD or not. My guess is that it meant greater profits for them.

I would say its a great excuse to justify the added cost to the masses and an incentive to set a DD that primarily benefits the companies, as we have experienced.

Sarahboo1912

All sorted now thanks. I switched to octopus and got exactly what I was looking for for a much better price. Thanks for all your help!