£400 DISCOUNT USED FOR DEBT

t0rt0ise

Mobtr said:

EdwardB said:

SammiJxx said:

I currently have a large debt (£1000) with British Gas for my electric - due to previously estimated bills. I have set up a monthly payment plan which is £201 usage & £24 for my debt, repaid over 5 years.
I have a pre-pay gas meter but currently, hardly using any gas as I am not using my heating and I boil a large pan of water for washing my dishes, etc.
My worry is that when the winter comes, I will be using over £100 on gas plus paying £225 per month for my electric.
I wasn't sure how the £400 would be distributed so I contacted British Gas via the online chat.
They have told me that the £400 will just be used against my debt so technically I will be worse off as I will still need to pay the agreed amount each month plus paying for my gas usage.

Are they allowed to do this ?

I have been told to ring up to set up a new payment plan as my debt will be lower but as it has been spread over 5 years, I estimate that my payments will only be about £7 less per month

Make a formal complaint and get the deadlock letter, then refer to the ombudsman on the bais that

BG Made an agreement that you have not  breached
The Gov provided this money to deal with the increase in Gas from October NOT for BG to service debt

My supplier told me it costs them £450 for a case to be referred to Ombudsman,so hopefully BG will see sense and agree to honour their commitment, if not it will cost them £450 and they may lose anyway.

What a ridiculous comment. How can you raise a complaint for something that hasn’t even happened yet? One advisor has said the money will be used against the debt , who’s to say they haven’t given incorrect information? My advice would be to wait until the first payment is given in October & see what they do with it, then raise a complaint if it’s fully taken off your debt. My second bit of advice would be to cut down your electricity usage £200 p/m is a lot to be paying so you must be a high user. 

I would imagine the £200 a month is building up a good credit for the winter. The £66 should be added to this making even more credit.

pochase

t0rt0ise said:

Mobtr said:

EdwardB said:

SammiJxx said:

I currently have a large debt (£1000) with British Gas for my electric - due to previously estimated bills. I have set up a monthly payment plan which is £201 usage & £24 for my debt, repaid over 5 years.
I have a pre-pay gas meter but currently, hardly using any gas as I am not using my heating and I boil a large pan of water for washing my dishes, etc.
My worry is that when the winter comes, I will be using over £100 on gas plus paying £225 per month for my electric.
I wasn't sure how the £400 would be distributed so I contacted British Gas via the online chat.
They have told me that the £400 will just be used against my debt so technically I will be worse off as I will still need to pay the agreed amount each month plus paying for my gas usage.

Are they allowed to do this ?

I have been told to ring up to set up a new payment plan as my debt will be lower but as it has been spread over 5 years, I estimate that my payments will only be about £7 less per month

Make a formal complaint and get the deadlock letter, then refer to the ombudsman on the bais that

BG Made an agreement that you have not  breached
The Gov provided this money to deal with the increase in Gas from October NOT for BG to service debt

My supplier told me it costs them £450 for a case to be referred to Ombudsman,so hopefully BG will see sense and agree to honour their commitment, if not it will cost them £450 and they may lose anyway.

What a ridiculous comment. How can you raise a complaint for something that hasn’t even happened yet? One advisor has said the money will be used against the debt , who’s to say they haven’t given incorrect information? My advice would be to wait until the first payment is given in October & see what they do with it, then raise a complaint if it’s fully taken off your debt. My second bit of advice would be to cut down your electricity usage £200 p/m is a lot to be paying so you must be a high user. 

I would imagine the £200 a month is building up a good credit for the winter. The £66 should be added to this making even more credit.

You have seen that OP is using gas for heating on a prepaid meter, so heating not included in the £200 payment.

Why would you build up a credit for winter for electricity if it is not needed for heating? Additional electricity use in winter is there, but it is maybe 10 to 20% if that.

Section62

EdwardB said:

The Gov provided this money to deal with the increase in Gas from October NOT for BG to service debt

That isn't what the government's own consultation document says.

SammiJxx

Section62 said:

pochase said:

I would think the payment plan agreed with the customer is the basis for this. A payment of £24 was agreed with the OP, I am assuming that this is the amount affordable.

So this is also the amount that can go towards debt.

I wouldn't be surprised if BG want to review the £24 going forward, partly to make sure it is still affordable with increasing energy/living costs, but also that £1000 paid in monthly installments of £24 should be cleared in 42 months (3 years 6 months, not 5).  Five year's worth of £24/month totals £1440.

If the £1440 figure is correct then it implies the OP would be paying £440 interest or charges - which seems improbable.  If interest were being charged on the debt then seeing whether it could be paid off sooner is always worth consideration.

Clearing £1000 over 5 years (with no interest) would equate to monthly payments of £16.67.

Unless I've missed something.

I have double checked the amounts and my payments are £202 for usage & £23 for debt 
60 x £23 = £1380.
Since my last bill, I have made 1 x payment of £137 (my previous monthly payment) & 1 x payment of £225 - until a new bill is created, all payments will come off my current bill so present amount owing is £1018

SammiJxx

EdwardB said:

SammiJxx said:

I currently have a large debt (£1000) with British Gas for my electric - due to previously estimated bills. I have set up a monthly payment plan which is £201 usage & £24 for my debt, repaid over 5 years.
I have a pre-pay gas meter but currently, hardly using any gas as I am not using my heating and I boil a large pan of water for washing my dishes, etc.
My worry is that when the winter comes, I will be using over £100 on gas plus paying £225 per month for my electric.
I wasn't sure how the £400 would be distributed so I contacted British Gas via the online chat.
They have told me that the £400 will just be used against my debt so technically I will be worse off as I will still need to pay the agreed amount each month plus paying for my gas usage.

Are they allowed to do this ?

I have been told to ring up to set up a new payment plan as my debt will be lower but as it has been spread over 5 years, I estimate that my payments will only be about £7 less per month

Make a formal complaint and get the deadlock letter, then refer to the ombudsman on the bais that

BG Made an agreement that you have not  breached
The Gov provided this money to deal with the increase in Gas from October NOT for BG to service debt

My supplier told me it costs them £450 for a case to be referred to Ombudsman,so hopefully BG will see sense and agree to honour their commitment, if not it will cost them £450 and they may lose anyway.

I am going to contact the department that set up the payment plan to confirm. I am hoping that the online agent has got the facts wrong. If not I will contact the Ombudsman

QrizB

SammiJxx said:

I have double checked the amounts and my payments are £202 for usage & £23 for debt

Which means you're currently spending £2424 a year on electricity, vs. the average household of around £1000. Depending on your tariff, that's something like 7000kWh/yr.

SammiJxx said:

MattMattMattUK said:

I will let others cover the situation with the £400 credit, but one thing to look at is that your electricity seems very high, at this time of year, and being a gas property for hot water for showering etc. then your electricity usage seems very high unless there is a particular reason you are consuming so much?

Electric shower, lighting, general day to day usage, washer & dryer (hardly used in the summer). As my bills have been estimated previously, the usage is based over 12 months and as prices have risen, so has my monthly cost.
I also have a very old light fitting that has a heat lamp round it in the bathroom and my grandchildren have a habit of leaving it on !!! - trying to find a way of disconnecting the heater or just replace the light with a more energy efficient one.

Nothing in that list - not even the heat lamp, unless it's left on every day for several hours - really explains why you're using 7000kWh/yr when the average household uses less than half that.

SammiJxx

pochase said:

t0rt0ise said:

Mobtr said:

EdwardB said:

SammiJxx said:

I currently have a large debt (£1000) with British Gas for my electric - due to previously estimated bills. I have set up a monthly payment plan which is £201 usage & £24 for my debt, repaid over 5 years.
I have a pre-pay gas meter but currently, hardly using any gas as I am not using my heating and I boil a large pan of water for washing my dishes, etc.
My worry is that when the winter comes, I will be using over £100 on gas plus paying £225 per month for my electric.
I wasn't sure how the £400 would be distributed so I contacted British Gas via the online chat.
They have told me that the £400 will just be used against my debt so technically I will be worse off as I will still need to pay the agreed amount each month plus paying for my gas usage.

Are they allowed to do this ?

I have been told to ring up to set up a new payment plan as my debt will be lower but as it has been spread over 5 years, I estimate that my payments will only be about £7 less per month

Make a formal complaint and get the deadlock letter, then refer to the ombudsman on the bais that

BG Made an agreement that you have not  breached
The Gov provided this money to deal with the increase in Gas from October NOT for BG to service debt

My supplier told me it costs them £450 for a case to be referred to Ombudsman,so hopefully BG will see sense and agree to honour their commitment, if not it will cost them £450 and they may lose anyway.

What a ridiculous comment. How can you raise a complaint for something that hasn’t even happened yet? One advisor has said the money will be used against the debt , who’s to say they haven’t given incorrect information? My advice would be to wait until the first payment is given in October & see what they do with it, then raise a complaint if it’s fully taken off your debt. My second bit of advice would be to cut down your electricity usage £200 p/m is a lot to be paying so you must be a high user. 

I would imagine the £200 a month is building up a good credit for the winter. The £66 should be added to this making even more credit.

You have seen that OP is using gas for heating on a prepaid meter, so heating not included in the £200 payment.

Why would you build up a credit for winter for electricity if it is not needed for heating? Additional electricity use in winter is there, but it is maybe 10 to 20% if that.

The only item I may use extra in winter is my tumble dryer & lights being on more. I had an issue with my boiler at the start of Covid, so had to use electric heaters & also an immersion heater for my hot water. At the moment if I want a full tank of water for a bath, then I am using the immersion heater and only putting it on for 1 - 2 hours per week at the most, as using gas to heat it up takes much longer. For small amounts of hot water, i use the gas hob & a pan.
As previous bills were estimated, I think the usage during this time has reflected in my payments. 
I have been asked to give regular meter readings so hopefully the estimated usage will decrease.

SammiJxx

QrizB said:

SammiJxx said:

I have double checked the amounts and my payments are £202 for usage & £23 for debt

Which means you're currently spending £2424 a year on electricity, vs. the average household of around £1000. Depending on your tariff, that's something like 7000kWh/yr.

SammiJxx said:

MattMattMattUK said:

I will let others cover the situation with the £400 credit, but one thing to look at is that your electricity seems very high, at this time of year, and being a gas property for hot water for showering etc. then your electricity usage seems very high unless there is a particular reason you are consuming so much?

Electric shower, lighting, general day to day usage, washer & dryer (hardly used in the summer). As my bills have been estimated previously, the usage is based over 12 months and as prices have risen, so has my monthly cost.
I also have a very old light fitting that has a heat lamp round it in the bathroom and my grandchildren have a habit of leaving it on !!! - trying to find a way of disconnecting the heater or just replace the light with a more energy efficient one.

Nothing in that list - not even the heat lamp, unless it's left on every day for several hours - really explains why you're using 7000kWh/yr when the average household uses less than half that.

My previous bills have been estimated and at the start of Covid, my boiler broke down - I had to use electric heaters and an immersion heater for hot water. They have looked at my usage over the last couple of years and this is their estimate. They have told me to submit regular meter readings so hopefully this will show that my usage is much lower and my payments should decrease

SammiJxx

Thank you everyone for your advice & suggestions.

I am going to speak to BG direct rather than an online agent.
I am going to look at what I am using & try to reduce where I can.
I am going to submit regular meter readings to keep on top of my bills.
If BG tell me that they are going to put the £400 discount against my debt, I will contact the Ombudsman and show them the statements regarding it being used for usage.

QrizB

SammiJxx said:

They have told me to submit regular meter readings so hopefully this will show that my usage is much lower and my payments should decrease

OK, that should help.

Could you share your readings here? We might be able to give a rough idea of what your actual ongoing costs are.