Direct Debit Hike

angada123

I am a single person living in a detached house. My dual fuel direct debit was £96 up until January this year. Then it was increased by OVO Energy to £ 299 in February. I haven't used the central heating during the winter, I hardly use the gas cooker, no lights so I don't understand how I am using some energy. I spoke to the Company and all they said is I am using too much energy. Help!!!

Coffeekup

First things first when we're your meter readings last taken? Are/were they accurate if taken by someone else? If not you'll have an estimated reading (E) on your bill.
Have you just finished a fixed deal in the last 6 months?

If your readings have been taken recently the tell us the previous time they were taken and post the readings of both reads of both meters here, sling with your current energy supplier and tariff.

wrf12345

Standard practice seems to be to triple the actual usage with new estimates and hope to get lots of money flowing into the company coffers. Ofgem say they are cracking down on this but it seems to be getting worse rather than better. Start taking daily meter readings to see what your actual usage is and then multiply by the unit rates from your bill (plus the rip-off standing charges, roughly 80p a day). Once you have a ballpark figure for daily use, multiple it by 30 to get the monthly sum and then, if the estimate is way out, inform the company and refuse to accept any attempt to fob you off - the agent will eventually refer it to her manager who will grudgingly allow a more reasonable DD.

MattMattMattUK

wrf12345 said:

Standard practice seems to be to triple the actual usage with new estimates and hope to get lots of money flowing into the company coffers.

No it is not, there have been some genuine cases of energy providers overestimating future Direct Debit payments, but the majority of the complaints are actually people failing to understand that rates have gone up and are going up again. Often the issues are compounded by people not submitting meter readings.

wrf12345 said:

Ofgem say they are cracking down on this but it seems to be getting worse rather than better. 

Ofgem are pushing energy providers to not increase Direct Debits as much publicly, but are also acknowledging that in many cases the rises are entirely legitimate and the issue is a lack of consumer understanding eg. I pay £x per month, I do not think I am using more energy, why is my Direct Debit going up! (cue tantrum/rant), where they are failing to understand that costs were increased in October and April and will rise again in the coming October. Many people's Direct Debits will correctly need to have more than doubled and in the cases where they were previously under paying and not submitting readings that can easily get into the tripling of payments range. 

wrf12345 said:

Start taking daily meter readings to see what your actual usage is and then multiply by the unit rates from your bill (plus the rip-off standing charges, roughly 80p a day). Once you have a ballpark figure for daily use, multiple it by 30 to get the monthly sum and then, if the estimate is way out, inform the company and refuse to accept any attempt to fob you off - the agent will eventually refer it to her manager who will grudgingly allow a more reasonable DD.

Daily usage patterns are pretty much pointless as they do not take into account significant variation over weeks or even months, additionally usage now with it being summer will be considerably lower than for annualised usage where winter increases usage.

The best method would be to look at previous actual readings and work out a entire year's usage, then work that out at current rates. June usage multiplied by 12 will come nowhere close to giving a correct annual figure. The energy provider will certainly not accept an annualised figure extrapolated from a week or two in sunny June. 

molerat

Good post.

In the vast majority of the posts we see on here on the subject the poster has not got a clue about their energy consumption patterns or costs.  Another one has  popped up with poster finding themselves £1K in debit after giving their first read for a long time and their DD going up form £57 pm to £257 even though they are on a fix until 2023.  They are in for a nasty shock in 2023 !

I have just had a 6 month review, I have ended it slightly in debit but my DD is staying the same

My daughter has a fair chunk of credit and her DD is increasing.

Both totally justified outcomes, annual consumption estimates in both cases IMO slightly on the low side.

wild666

MattMattMattUK said:

wrf12345 said:

Standard practice seems to be to triple the actual usage with new estimates and hope to get lots of money flowing into the company coffers.

No it is not, there have been some genuine cases of energy providers overestimating future Direct Debit payments, but the majority of the complaints are actually people failing to understand that rates have gone up and are going up again. Often the issues are compounded by people not submitting meter readings.

wrf12345 said:

Ofgem say they are cracking down on this but it seems to be getting worse rather than better. 

Ofgem are pushing energy providers to not increase Direct Debits as much publicly, but are also acknowledging that in many cases the rises are entirely legitimate and the issue is a lack of consumer understanding eg. I pay £x per month, I do not think I am using more energy, why is my Direct Debit going up! (cue tantrum/rant), where they are failing to understand that costs were increased in October and April and will rise again in the coming October. Many people's Direct Debits will correctly need to have more than doubled and in the cases where they were previously under paying and not submitting readings that can easily get into the tripling of payments range. 

wrf12345 said:

Start taking daily meter readings to see what your actual usage is and then multiply by the unit rates from your bill (plus the rip-off standing charges, roughly 80p a day). Once you have a ballpark figure for daily use, multiple it by 30 to get the monthly sum and then, if the estimate is way out, inform the company and refuse to accept any attempt to fob you off - the agent will eventually refer it to her manager who will grudgingly allow a more reasonable DD.

Daily usage patterns are pretty much pointless as they do not take into account significant variation over weeks or even months, additionally usage now with it being summer will be considerably lower than for annualised usage where winter increases usage.

The best method would be to look at previous actual readings and work out a entire year's usage, then work that out at current rates. June usage multiplied by 12 will come nowhere close to giving a correct annual figure. The energy provider will certainly not accept an annualised figure extrapolated from a week or two in sunny June. 

IMHO I Think some suppliers are increasing DD's with the October prices in mind so that they won't have to email the users again saying that they are increasing their DD again. 
Someone using the average usage should be paying £233. 34 per month from October, this is one twelfth of the proposed increase to £2800. At the same time someone using the average figures now would be paying £164.25 per month. 
Personally I am nowhere near an average user with a combined usage of under 2600 kWh per year, my yearly bill will be just over £782, maybe even less if I cut back more.

MattMattMattUK

wild666 said:

MattMattMattUK said:

wrf12345 said:

Standard practice seems to be to triple the actual usage with new estimates and hope to get lots of money flowing into the company coffers.

No it is not, there have been some genuine cases of energy providers overestimating future Direct Debit payments, but the majority of the complaints are actually people failing to understand that rates have gone up and are going up again. Often the issues are compounded by people not submitting meter readings.

wrf12345 said:

Ofgem say they are cracking down on this but it seems to be getting worse rather than better. 

Ofgem are pushing energy providers to not increase Direct Debits as much publicly, but are also acknowledging that in many cases the rises are entirely legitimate and the issue is a lack of consumer understanding eg. I pay £x per month, I do not think I am using more energy, why is my Direct Debit going up! (cue tantrum/rant), where they are failing to understand that costs were increased in October and April and will rise again in the coming October. Many people's Direct Debits will correctly need to have more than doubled and in the cases where they were previously under paying and not submitting readings that can easily get into the tripling of payments range. 

wrf12345 said:

Start taking daily meter readings to see what your actual usage is and then multiply by the unit rates from your bill (plus the rip-off standing charges, roughly 80p a day). Once you have a ballpark figure for daily use, multiple it by 30 to get the monthly sum and then, if the estimate is way out, inform the company and refuse to accept any attempt to fob you off - the agent will eventually refer it to her manager who will grudgingly allow a more reasonable DD.

Daily usage patterns are pretty much pointless as they do not take into account significant variation over weeks or even months, additionally usage now with it being summer will be considerably lower than for annualised usage where winter increases usage.

The best method would be to look at previous actual readings and work out a entire year's usage, then work that out at current rates. June usage multiplied by 12 will come nowhere close to giving a correct annual figure. The energy provider will certainly not accept an annualised figure extrapolated from a week or two in sunny June. 

IMHO I Think some suppliers are increasing DD's with the October prices in mind so that they won't have to email the users again saying that they are increasing their DD again.

Almost all are accounting for a prediction of the rise in October when estimating Direct Debit figures, some of the variance will be based on their estimates of the October rise. 

wild666 said:

Someone using the average usage should be paying £233. 34 per month from October, this is one twelfth of the proposed increase to £2800. At the same time someone using the average figures now would be paying £164.25 per month. 

The thing is the average user is one of those convenient things for public reporting, but is not hugely reflective for most individual users. Too many people seem to look at the average bill, think that is what they should be paying then go into meltdown when their bill is significantly higher, with the reason that it is higher being that they use a lot more energy. 

wild666 said:

Personally I am nowhere near an average user with a combined usage of under 2600 kWh per year, my yearly bill will be just over £782, maybe even less if I cut back more.

That is a really good figure to be at, I am all electric and my annual usage is around 4,700 kWh and I could not get it much lower without significant lifestyle and working changes. I work from home several days a week and have a high end PC (graphics, video editing during work, and also gaming in personal time) which can draw 600-800 watts under high load (and will get higher when the RTX 4080 comes out), luckily my flat is well insulated so I rarely need the heating even in the coldest parts of winter, but I know that heating water increases in cost significantly in winter (inflow temperature is lower). If I stopped working from home two days a week I could save money, but it would cost me more in petrol, if I gave up gaming then I could probably save 400 kWh per year. I would rather pay less for my energy, but I also do not want to impact my lifestyle hugely if I have the choice.