The £400 discount

Effician

Think this covers the low dd payers situation.

From page 29.

We are sympathetic to the fact that some suppliers may not feasibly be able to reduce a

customer’s Direct Debit collection. If suppliers cannot feasibly reduce the amount charged, we will allow the EBSS payment to be delivered by suppliers in the form of refund to customers’
bank accounts following normal collection of established Direct Debit payments

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1095358/energy-bills-support-scheme-government-response.pdf

MWT

pochase said:

I would assume they are working from the assumption that the normal direct debit will cover the usage.

In this case after you get the £400 back you still have fully paid your energy bill, and you have the £400 back in your pocket, thus having reduced your energy cost.

Exactly, people seem to be missing the point that the £66 is paid into your account to go against your use, the DD is reduced by £66 so you are better off having paid £66 less.

As long as your DD is set correctly then you are benefiting by £400 that you will not have to pay for your energy...

If your DD is not sufficient to cover your use, then yes, you should increase it by £66 to make sure the money goes against your energy debt...

Sea_Shell

MWT said:

pochase said:

I would assume they are working from the assumption that the normal direct debit will cover the usage.

In this case after you get the £400 back you still have fully paid your energy bill, and you have the £400 back in your pocket, thus having reduced your energy cost.

Exactly, people seem to be missing the point that the £66 is paid into your account to go against your use, the DD is reduced by £66 so you are better off having paid £66 less.

As long as your DD is set correctly then you are benefiting by £400 that you will not have to pay for your energy...

If your DD is not sufficient to cover your use, then yes, you should increase it by £66 to make sure the money goes against your energy debt...

So how many people are actually going to have a DD that accurately reflects their costs/usage with effect from 1st October, before £66 is deducted???   

I'd suggest not many, especially as some will try and keep their DD as low as possible for as long as possible, unless FORCED to increase it!!   I've seen this already with family.  

pochase

But in this case you still have £400 in your pocket that you should have paid towards your energy, so you are still £400 better off.

And if you were unable to pay the £400 you are now £400 less in debt.

jbuchanangb

Quotations from the government web site.

Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over the 6 month period – totalling £400."

Households will see a discount of £66 applied to their energy bills in October and November, rising to £67 each month from December through to March 2023. The non-repayable discount will be provided on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card.

Direct Debit customers will receive the Energy Bill discount automatically as a deduction to the monthly Direct Debit amount collected, or as a refund to the customer’s bank account following Direct Debit collection during each month of delivery

standard credit customers and payment card customers will see the Energy Bill discount automatically applied as a credit to standard credit customers’ accounts in the first week of each month of EBSS delivery, with the credit appearing as it would if the customer had made a payment.

I think I am beginning to understand. As a monthly DD payment customer I will see two things happen. (A) credit applied to my electricity account. (B) Equivalent reduction in that month's DD payment.

swaledale_one

Thanks everyone, my current DD is set at £2 then I pay the bill using debit card in £5.01 ago till it's paid.

I'll up DD to £66 or £67 to be safe.

MWT

Sea_Shell said:

So how many people are actually going to have a DD that accurately reflects their costs/usage with effect from 1st October, before £66 is deducted???   

I'd suggest not many, especially as some will try and keep their DD as low as possible for as long as possible, unless FORCED to increase it!!   I've seen this already with family.  

As long as people are not fighting the energy company to reduce the DD one would hope that most will have it set at least close to the right range by then.

If people are resisting setting it 'correctly' then there isn't a lot we can do to help, however this system is operated some people will not be protected from their own behaviour, and there comes a point where you just can't make the whole system revolve around that group.

Everyone with a domestic electricity account will get the £400 one way or another, to what extent they subvert the intention to have it go towards energy costs is going to remain in their own hands to some extent.

Sea_Shell

Another thing maybe to keep in mind is that *debit balances on your energy account are interest free. (Aren't they?)

If people end up paying that debit off with an interest charging credit card or overdraft, maybe it's best to "let it ride" for as long as you can?


*Obviously it will have to be paid eventually, and amounts of "allowed" debit balance will vary between suppliers, before action is taken.

MWT

Sea_Shell said:

Another thing maybe to keep in mind is that *debit balances on your energy account are interest free. (Aren't they?)

If people end up paying that debit off with an interest charging credit card or overdraft, maybe it's best to "let it ride" for as long as you can?


*Obviously it will have to be paid eventually, and amounts of "allowed" debit balance will vary between suppliers, before action is taken.

Yes, this is standard advice from a 'debt-free' perspective, don't incur interest to pay off a debt that doesn't accrue interest.

Also energy companies will tend to be slow to chase and willing to agree payment plans to spread the debt over time, but there are exceptions that are quick to sell the debt on to collection agencies, so figure out which type you are dealing with...

Sea_Shell

MWT said:

Sea_Shell said:

Another thing maybe to keep in mind is that *debit balances on your energy account are interest free. (Aren't they?)

If people end up paying that debit off with an interest charging credit card or overdraft, maybe it's best to "let it ride" for as long as you can?


*Obviously it will have to be paid eventually, and amounts of "allowed" debit balance will vary between suppliers, before action is taken.

Yes, this is standard advice from a 'debt-free' perspective, don't incur interest to pay off a debt that doesn't accrue interest.

Also energy companies will tend to be slow to chase and willing to agree payment plans to spread the debt over time, but there are exceptions that are quick to sell the debt on to collection agencies, so figure out which type you are dealing with...

It would be interesting, and helpful, for people to know which suppliers fall into which category.

Relaxed or hard-line?


We always (historically) seemed to end up changing suppliers in Spring, so very rarely, if ever, had a debit balance of more than a few £s.   If you changed suppliers in Autumn you could be running a substantial debit balance by spring.   But that's how level DDs are supposed to work.


So I don't know Eon's view on debit balances.