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

wild666

Duhelu101 said:

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.

The £400 is likely to be paid over 6 months at roughly £66.67 per month. What they should have done, IMHO, is add an increase from 1/10/22 then deducted the £66.66 monthly payment from the DD then recalculate the DD in 3 or 6 months. 
What supplier do is take the next 6 or 12 months readings estimate and calculate the bill on those figures with no regards for any credit that will be paid by the government but are very quick when it comes to a debt on the account.

Alnat1

Be aware that nothing definite has been said about when the £400 will hit our energy accounts, government have only said "in the 6 months from October".

It could be that your energy company credit it as a whole amount in April, which means the 6 months of DDs from now until January would need to be at a higher amount.

Astria

Chrysalis said:

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?

I have a completely seperate bank account for all my bills, and put money into it every month by SO, so I don't need the energy companies doing the same. All other service providers bill me and DD for what they need so I don't see why energy should be any different. If you think you can easily pay your winter bills as well as your summer bills then there's no need for a budget direct debit  - just go for a variable one instead.

Chrysalis

Astria said:

Chrysalis said:

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?

I have a completely seperate bank account for all my bills, and put money into it every month by SO, so I don't need the energy companies doing the same. All other service providers bill me and DD for what they need so I don't see why energy should be any different. If you think you can easily pay your winter bills as well as your summer bills then there's no need for a budget direct debit  - just go for a variable one instead.

Well the question was to him, I was trying to entice a reply where he admitted the fixed DD is not all that good for those who dont fit the common usage profile leading to long term credit balances.

Personally I discipline myself without the need of a second account, but I do like your method for those who simply need to isolate the money.

greyteam1959

Remember of course that a number of companies do not accept full bill payment by direct debit.

EssexHebridean

Chrysalis said:

Astria said:

Chrysalis said:

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?

I have a completely seperate bank account for all my bills, and put money into it every month by SO, so I don't need the energy companies doing the same. All other service providers bill me and DD for what they need so I don't see why energy should be any different. If you think you can easily pay your winter bills as well as your summer bills then there's no need for a budget direct debit  - just go for a variable one instead.

Well the question was to him, I was trying to entice a reply where he admitted the fixed DD is not all that good for those who dont fit the common usage profile leading to long term credit balances.

Personally I discipline myself without the need of a second account, but I do like your method for those who simply need to isolate the money.

One good reason for people using separate accounts for "stashed" money towards energy bills right now is that it can then be kept somewhere where it will actually earn at least some interest rather than sitting in a current account earning peanuts or worse during the low use months. Even if it were down to a "need" to keep the money separate, it's not always down to lack of discipline... 

jimjames

Chrysalis said:

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?

No, I'd suggest exactly the same thing. I'm not suggesting fixed DD in case you'd not realised. I'm suggesting pay on bill DD which means you have higher bills in winter but don't run a credit balance with the company. As I said in my OP it isn't likely to be suitable for all as some people won't be able to manage the variations.