Energy Direct Debit - tip for lessening the huge increase they want

Duhelu101

I was notified today that my Direct Debit was going to go up (almost 100%). They gave the estimate of how they had calculated my energy for the next 6 month to when my next bill was due; that divided by 6 = the amount they wanted.  I pointed out that in October the Government is paying in £400 so if I took that off my 6 month estimate then divided by 6 it was actually less than my current DD.  They have agreed to leave it at the current level.  Hope it might help someone argue their case.

pochase

Did you take also into account that the cost will go up another 65% from October as currently predicted?

GibbsRule_No3.

Bit confused by people, including Martin, going on about the problem with DDs are they not just an option of a way to pay?  Unless the tariff you have insists on paying by DD, even then surely it is up to you to set the DD you want.  Pre-payment meter I get but DDs?  I set my DD with EDF as they wanted it to stay the same and I knew the bill would go up, so raised it by £15 a month taking into account the £400 that is being removed from all bills.  At present I am still in credit, so hope to break even over the next 6 month bill cycle when the prices rise but the £400 comes off.

Maybe put the DD into a spare account and pay when the actual bill arrives, or have I missed something glaringly obvious?

EssexHebridean

You've missed the fact that to get the cheapest prices relies on paying by DD, perhaps. But yes, for some people a variable DD when you pay the amount on each bill is workable - that is definitely not for anyone with a less than tight grip on budgeting though as the risk of ending up in debt is huge compared to the more standard regular amount debited monthly. 

Some energy suppliers will be guided by the amount the customer would prefer to pay - but in my experience you do need to be able to demonstrate that you are extremely good at managing your account and adjusting the amount as needed. Even then, some (Bulb, I'm looking at you) will insist they have to take a specific amount which may be higher than the customer might like. 

For clarity as some may not realise - A Direct Debit is instigated by the provider of a service - they set the amount they will take, give you notice of it and then request it from your bank.
A Standing Order is when the customer sets the amount and makes the arrangement to send it to a supplier's bank directly from their own. 

lisyloo

Viz top tip: pay the bill.

I pay mine by DD and get the discount but it’s a variable DD.
I’ll have high bills in the winter but no stupid overestimated DDs and not huge credit balances either,

Ultrasonic

Duhelu101 said:

I pointed out that in October the Government is paying in £400 

Note that it is not yet clear how/when this payment will be received. It may be in monthly instalments over a 6 month period from October for example. All the official info. says is, "Energy suppliers will deliver this support to households with a domestic electricity meter over six months from October.".

Source: Cost of living support factsheet: 26 May 2022 - GOV.UK (www.gov.uk)

I agree with you general point that DD amounts should factor the government support in, but also be mindful of how much more energy you'll use in winter and the higher costs from October (unless you're on a fixed tariff).

Getferret

Bulb increased my DD 2.5 times in the last year despite always being on credit. My spring/summer bills are very low, each month I open the App and lower the DD (refuse to let Bulb gain interest on my credit).  When winter comes and usage units treble I will use the top-up account feature.

si_74

I understand all the above and I know there are times when DD's are set too high. But I am still hearing from people things like 'my energy hasn't gone up because my DD is still the same'.....the sorry fact is that these same people will be the ones with big deficits in their accounts come spring. Yes don't accept a DD that is too high, and if you are good at budgeting then hold the cash somewhere else until it's needed but IMO artificially low DD's are going to be at least as big a problem as artificially large....at least you will get that money back at some point.

Chrysalis

Yeah a fixed DD isnt much safer in this climate for budget-less people, seen a tiktok video where the lady was complaining about a recent £500 bill (which is estimated), there was no mention of what tariff she is on, her usage or unit rates, she was merely bothered by the size of the bill.

Now I could also see the account itself was £1700 in debit, the screen she was showing had the recent billing history, and so I knew the debt was over 9 months worth of bills.

You can be in debt whether fixed DD or variable, however consider the problem that many people treat fixed DD as if its unmetered (as usage changes dont immediately show up either up or down).

jimjames

Tip for lessening the amount they want for DD - pay on bill by DD and put the amounts into a savings account to cover it. Chances are that most people won't be able to do that and find the DD monthly a better option. 
It will be a shock for many when their bills are massively more in winter than summer which the monthly DD smooths.

Chrysalis

jimjames said:

Tip for lessening the amount they want for DD - pay on bill by DD and put the amounts into a savings account to cover it. Chances are that most people won't be able to do that and find the DD monthly a better option. 
It will be a shock for many when their bills are massively more in winter than summer which the monthly DD smooths.

What about for people who have winter bills similar sized to summer bills? You still suggest fixed for those guys?