British Gas explanation of how the EBSS scheme will work

Billxx

Received an email today from BG re the EBSS scheme:

"For Direct Debit customers, we’ll send the discount straight to your bank each month – like a refund – once your Direct Debit has gone through.

For example:
If your Direct Debit is £100 a month, you’d pay that as normal. Then a few days later, £67 will be paid in to your bank account. If your Direct Debit is less than £67 a month, say £50 for example, £50 will be refunded to your bank account and the remaining £17 will be applied as credit to your energy account".

So six monthly payments totalling £400.  Is the scheme implemented the same way by all providers?

Ultrasonic

Not the same with all suppliers as some are reducing the direct debit amounts rather than taking money and then giving a credit back. The former seems more logical to me but I actually wish my supplier did the same as BG as I'd get more cashback (Santander 123 Lite).

facade

Billxx said:

So six monthly payments totalling £400.  Is the scheme implemented the same way by all providers?

Yes, it is prescribed. see https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

they have to either

reduce your DD by £66 a month in October and November, then £67 for December to March

or

They can take the full amount, and pay the £66 or £67 as a refund following collection of the debit (presumably this allows them to earn some interest)

It doesn't look like they can keep some of it back as credit if you are a low use DD customer though in the way BG say.....

Sea_Shell

Surely this credit should be in addition to your payments on your energy account to help you pay for the increased cost of the energy...not simply refunded??

So you still pay £100, they pay £66, so you have £166 credited to your account against billed usage of....[insert massive figure here]

DDs are likely to a least need to stay unaltered if not increased even further!!

 

Section62

facade said:

It doesn't look like they can keep some of it back as credit if you are a low use DD customer though in the way BG say.....

No, they can.  In accordance with the government's response to the consultation they can/should credit the customers energy account with the balance.

See page 29 -

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

Ultrasonic

Sea_Shell said:

Surely this credit should be in addition to your payments on your energy account to help you pay for the increased cost of the energy...not simply refunded??

So you still pay £100, they pay £66, so you have £166 credited to your account against billed usage of....[insert massive figure here]

DDs are likely to a least need to stay unaltered if not increased even further!!

 

No I think what's happening makes sense. Note that for those on the SVT the direct debit amount will be increasing significantly soon, so the reduction will then help with this.

pochase

Sea_Shell said:

Surely this credit should be in addition to your payments on your energy account to help you pay for the increased cost of the energy...not simply refunded??

So you still pay £100, they pay £66, so you have £166 credited to your account against billed usage of....[insert massive figure here]

DDs are likely to a least need to stay unaltered if not increased even further!!

 

The way it OP describes what BG will do is

- they take your £100
- they credit your account with the £100
- they transfer the £66/£67 from the government back into your bank account

In the end you have £100 credited to your energy account and £66 back in your bank. So you have only paid £34

Sea_Shell

Ultrasonic said:

Sea_Shell said:

Surely this credit should be in addition to your payments on your energy account to help you pay for the increased cost of the energy...not simply refunded??

So you still pay £100, they pay £66, so you have £166 credited to your account against billed usage of....[insert massive figure here]

DDs are likely to a least need to stay unaltered if not increased even further!!

 

No I think what's happening makes sense. Note that for those on the SVT the direct debit amount will be increasing significantly soon, so the reduction will then help with this.

Will most (all) suppliers INSIST on a DD increase from 1st October (SVT) though...or will some let people carry on as they were, until such time as their debit balances need attention?

Will some suppliers merely "suggest" an increase?

Jyana

facade said:

Billxx said:

So six monthly payments totalling £400.  Is the scheme implemented the same way by all providers?

Yes, it is prescribed. see https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

they have to either

reduce your DD by £66 a month in October and November, then £67 for December to March

or

They can take the full amount, and pay the £66 or £67 as a refund following collection of the debit (presumably this allows them to earn some interest)

It doesn't look like they can keep some of it back as credit if you are a low use DD customer though in the way BG say.....

That's the bit that has me puzzled. Going by the British Gas email that some people have had today, it looks like some of the £400 will be going to the energy accounts for low users, but not for anyone whose monthly payment is over £67.

Ultrasonic

Jyana said:

facade said:

Billxx said:

So six monthly payments totalling £400.  Is the scheme implemented the same way by all providers?

Yes, it is prescribed. see https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

they have to either

reduce your DD by £66 a month in October and November, then £67 for December to March

or

They can take the full amount, and pay the £66 or £67 as a refund following collection of the debit (presumably this allows them to earn some interest)

It doesn't look like they can keep some of it back as credit if you are a low use DD customer though in the way BG say.....

That's the bit that has me puzzled. Going by the British Gas email that some people have had today, it looks like some of the £400 will be going to the energy accounts for low users, but not for anyone whose monthly payment is over £67.

Correct, as per government rules. I think the logic is that the £400 must be used for energy bills.

pochase

In theory the direct debits should be set to cover the usage, but I think we know how many are going to call the suppliers to complain until they are reduced. 

So in theory it is absolutely right that the money will be returned. In praxis it would be much more sensible for many if it would be added to the account balance.

Nice additional point here is that the money is only returned when the direct debit is received. So our friends from Don't pay will pay at least £400 into their energy accounts.