Do you pay for what you use?

Liberal

Of course you do but how? I used to pay a fixed amount each month supposedly based on my annual usage. Since moving house last October I have a direct debit with eon next which means I pay each month for just my usage . So much easier to manage and more transparent. Obviously winter months are a lot more expensive but what other benefits are there to paying fixed sum? Why do not more people do it this way and put money into savings for winter months? I just could never get on top of billing process before

[Deleted User]

Hi,

the fixed DD helps level out monthly payments, rather than smallish bill in summer and bigger bills in winter with heating being used.

Northern_Wanderer

Yes, I pay for what I use each month and save an amount each month to a separate personal account. I have been putting away and extra 30%  each month on top of my expected annual usage divided by 12 to go towards increase in October, which I now know is not enough.

sully1311

Liberal said:

Of course you do but how? I used to pay a fixed amount each month supposedly based on my annual usage. Since moving house last October I have a direct debit with eon next which means I pay each month for just my usage . So much easier to manage and more transparent. Obviously winter months are a lot more expensive but what other benefits are there to paying fixed sum? Why do not more people do it this way and put money into savings for winter months? I just could never get on top of billing process before

It's a lot easier for many to budget each month by having a fixed DD. For me personally, I would hate to have a variable DD.

Liberal

I do understand the budget bit but it's got to be paid anyway and I just think it is so much better to be able to clearly see that you are paying for what you have used. So easy not to keep track if it is a fixed amount each month. I was just wondering if there are any other possible advantages. 

[Deleted User]

Liberal said:

I do understand the budget bit but it's got to be paid anyway and I just think it is so much better to be able to clearly see that you are paying for what you have used. So easy not to keep track if it is a fixed amount each month. I was just wondering if there are any other possible advantages. 

I get a bill every month and I pay for what I use. I get a detailed statement that runs to over 33 pages! I also have Apps that give me 30 minute; hourly; daily; monthly and annual usage and costs.

Don’t conflate monthly DD amounts with energy charges. A monthly DD is nothing more than putting money aside to pay for the bill when it arrives. You have to be a certain type of person who is prepared to put away enough money for a Winter bill after, say,  a big freeze - and in some cases pay up to 7% more for the privilege. 

Marvel1

Yes, I have a prepayment meter.

ZolaBuddy

I pay for what I use via variable DD and have been doing so for the last 3 years. I have a detailed trending spreadsheet of my actual electric and gas usage. From that I've been able to work out how much I need to save during the winter months along with entering worse-case scenario rates of standard charges and unit price rates - as I have done in preparation for October's 70%+ uptick of the price cap.

As a consequence I have put around £3000 into premium bonds as savings and will call them off as and when needed when my next bills arrive.

I don't like the idea of handing over a higher fixed amount every month even though I can see some benefits. Instead I'll save - and at the same time, who knows I might win a few quid on the Premium Bonds!

MattMattMattUK

Liberal said:

Of course you do but how? I used to pay a fixed amount each month supposedly based on my annual usage. Since moving house last October I have a direct debit with eon next which means I pay each month for just my usage . So much easier to manage and more transparent. Obviously winter months are a lot more expensive but what other benefits are there to paying fixed sum? Why do not more people do it this way and put money into savings for winter months? I just could never get on top of billing process before

I pay a fixed monthly direct debit, no reason not too, I build up credit in summer, I run it down in winter, I adjust it based on my estimates of usage. No particular reason but it is no harm in paying an average cost of the whole year, variable does not bother me, I could afford it even without putting the money into savings, but I do not feel the need. Billing is fairly simple, you pay a fixed amount every month, every billing cycle they calculate your costs from usage and subtract your payments, then you end up either in credit or debt, which you then balance off. No tiny summer payments, no huge winter payments, no issues either way. Some people prefer variable, some people prefer standard direct debit, is is purely a personal preference, or ambivalence. 

[Deleted User]

ZolaBuddy said:

I pay for what I use via variable DD and have been doing so for the last 3 years. I have a detailed trending spreadsheet of my actual electric and gas usage. From that I've been able to work out how much I need to save during the winter months along with entering worse-case scenario rates of standard charges and unit price rates - as I have done in preparation for October's 70%+ uptick of the price cap.

As a consequence I have put around £3000 into premium bonds as savings and will call them off as and when needed when my next bills arrive.

I don't like the idea of handing over a higher fixed amount every month even though I can see some benefits. Instead I'll save - and at the same time, who knows I might win a few quid on the Premium Bonds!

Exactly what I have done but not for as long as you

TheAble

Liberal said:

I do understand the budget bit but it's got to be paid anyway and I just think it is so much better to be able to clearly see that you are paying for what you have used. So easy not to keep track if it is a fixed amount each month. I was just wondering if there are any other possible advantages. 

Your method sounds fine, as long as you don't have to pay extra for the privilege. I currently pay a fixed DD but would consider a variable if so. Doesn't make a great deal of difference though really.