Standing Order means lower bills.

lsur02

MWT said:

lsur02 said:

EssexHebridean said:

PLEASE can either a board guide or @MSE_ForumTeam5 or someone similar look at changing the subject line on this thread - or at the least adding a sizeable "headline" above the post stating that it's a misleading title! Goodness knows there is enough confusion about this one already! 

In what way misleading?  The bill is what they want you to pay.  Imposing a minimum of 100% more than what you use is a bill but an unfair one.  With SO you pay what you use, not the excess, so the bill is reduced.

You are just repeating the same mistake...

The bill defines how much you owe, the DD is your payment into your account from which the amount you owe will be deducted.

Paying by SO with most suppliers will increase your bills as the tariff is higher if you are not paying by DD.

You can achieve what you wish with most suppliers by switching to variable direct debit as the payment method, but not by switching to SO unless you are with one of the very few suppliers that do not charge extra for anything other than DD...

How do you know what most suppliers do?  I pay what Bulb asks and a bit more but not the excess they demand as their minimum DD amount. Companies are asking exessive amounts and abusing the DD method to do so. There is no mistake here!

Sea_Shell

lsur02 said:

Sea_Shell said:

I'll try again...

For them to CHARGE you double on your BILL, they'd have to be using completely the wrong readings.

Ignore the DD for a moment...have they actually calculated your BILL on correct (and accurate) meter readings?

Or are they overestimating your meter readings?  If so, give them accurate ones today!

 

No.  Bulb get accurate readings from me every month, in time for the month's bill. They send me a statement with the amount used.  They then try to get me to pay twice the amount using DD because that is what the minimum payment when using the DD that they want me to set up.  The payment cannot be reduced below that minimum.

A lot of this is automated and out of the control of the customer.  A SO puts control back in the customer's hands so one can pay according to usage, not the minimum demanded by the DD set up.

You must be using a different company so it may well be a different arrangement.  Why not email them and see what they say about setting up a SO?

Well personally, I'm overpaying on DD for extra Santander cashback.   I don't want to pay by SO or variable DD at this time.

lsur02

Sea_Shell said:

Example

If your annual usage would result in level DDs all year of, say £200, and your current monthly usage is only £100, you think you're being charged double?

At the same time ignoring the fact that winter usage could be £400 and your DD would still be £200!!!

That's how they work!

You increase the SO as the seasonal use changes. DD is not the only way to pay and is being abused by the companies.

[Deleted User]

The suppliers are told to make sure that customers don't run a big debt through the winter (reportedly to avoid bill shock).  They do this by suggesting a DD that will be much higher than summer usage, and correspondingly lower than winter usage.

If you don't build up that credit (because you seem to think this is abusing the system), then the calculator they have to use determines that you need to build up the credit faster - making the suggested DD higher.

If you use the suggested DD and build up more credit that you think you should - just ask for it back.  If you get to the account year end with a big credit, the next year suggested DD will be lower.

You're breaking the system because you think there is a conspiracy.  That's the mistake.

MWT

lsur02 said:

How do you know what most suppliers do?  I pay what Bulb asks and a bit more but not the excess they demand as their minimum DD amount. Companies are asking exessive amounts and abusing the DD method to do so. There is no mistake here!

Until you can get it clear in your mind that the DD is not the bill you will continue to make the same mistake and give out the same very wrong advice... if people do as you say and switch to SO with most suppliers they will pay higher bills...

What you are talking about is cash-flow, not bills and you need to look at the position over 12 months, not month by month...

The money you would pay as a DD is still your money, just sitting in their account until it is taken to meet a bill...

Doing what you suggest will keep your money in your own bank account for longer, but it will never reduce the bills you will receive over the course of a year and with most suppliers it will result in those bills being higher than they would have been with DD payments....

Martico

Just checked my last year. 
Aug (lowest use) - I used £34 in energy, I paid £64 in the month
Jan (highest use) - I used £135 in energy, I paid £64 in the month
12 months - I used £756 in energy, I paid £768, so my credit rose slightly over the course of the year, but not by enough to be a concern.

Were I on SVR, I would expect that monthly £64 to just about double now, but I'd still pay the same total over the course of the year. 

I prefer to pay that way, as my monthly income is fixed and I have certainty.
If I chose to pay monthly what I used in the month I'd go by variable DD, it's much less hassle than SO. 

MattMattMattUK

lsur02 said:

Sea_Shell said:

Example

If your annual usage would result in level DDs all year of, say £200, and your current monthly usage is only £100, you think you're being charged double?

At the same time ignoring the fact that winter usage could be £400 and your DD would still be £200!!!

That's how they work!

You increase the SO as the seasonal use changes. DD is not the only way to pay and is being abused by the companies.

It is not being abused, unfortunately the issue is that you do not understand. 

The monthly Direct Debit amount is supposed to reflect one twelfth of the estimated costs over the next year. That would mean that with no price fluctuations you would pay more than your usage in summer and less than your usage in winter. With rising prices that complicates things further, but at a rough estimate a summer month in May-September from this year would likely cost less than a fifth of October, November or December and could cost less than an eighth of January, February 2023. The Direct Debit system in this case is desgined to reduce those dramatic swings. If you are don't mind changing wildly varying amounts throughout the year then fine, however it is not saving you any money and they are not abusing you. Additionally in paying by Standing Order you are increasing your bills as there is a higher unit rate and standing charge for not paying by Direct Debit. Your idea that you are saving money is wrong, you are actually costing yourself more. 

lsur02 said:

MWT said:

lsur02 said:

EssexHebridean said:

PLEASE can either a board guide or @MSE_ForumTeam5 or someone similar look at changing the subject line on this thread - or at the least adding a sizeable "headline" above the post stating that it's a misleading title! Goodness knows there is enough confusion about this one already! 

In what way misleading?  The bill is what they want you to pay.  Imposing a minimum of 100% more than what you use is a bill but an unfair one.  With SO you pay what you use, not the excess, so the bill is reduced.

You are just repeating the same mistake...

The bill defines how much you owe, the DD is your payment into your account from which the amount you owe will be deducted.

Paying by SO with most suppliers will increase your bills as the tariff is higher if you are not paying by DD.

You can achieve what you wish with most suppliers by switching to variable direct debit as the payment method, but not by switching to SO unless you are with one of the very few suppliers that do not charge extra for anything other than DD...

How do you know what most suppliers do?  I pay what Bulb asks and a bit more but not the excess they demand as their minimum DD amount. Companies are asking exessive amounts and abusing the DD method to do so. There is no mistake here!

The information on tariffs is published for all to see, the methodology is regulated. There is a mistake, it is yours.

pochase

Yes exactly, you increase your SO, but the direct debit would not be increased.

The direct debit is what they estimate you will use in 12 months divided by 12. You will pay to much in summer, and not enough in winter on a monthly base.

What you are doing is half paying on receipt of a bill, you are adjusting you standing order so it half way matches.

As mentioned already, if your direct debit amount is set to for example £200 you can expect £400 to £600 for the coldest month.

Your title is misleading, you are not paying a single pence less for your energy, you are just not building up a credit for the cold months with your supplier. So in theory you might be able to get a few pound in interest if you are lucky. Other people here earn more in cashback by paying by direct debit.

For you there are no penalties for paying by standing order as Bulb does give the 5% to 7% discount for all payment forms.

The additional cost that suppliers are allowed to bill for non direct debit payment is also regulated by Ofgem. They can bill up to the 7% more, and most suppliers will do this, so for the 80% who are not with Octopus or Bulb your advice will cost them money, potentially hundreds of pounds.

Sea_Shell

I think we need an animated "banging your head against a brick wall" emoji 😉🙄

MattMattMattUK

Sea_Shell said:

I think we need an animated "banging your head against a brick wall" emoji 😉🙄

The OP is another example of Dunning-Kruger in action, these kind of people seem to becoming all to regular as posters and whilst I care little for the financial issues that they cause themselves I feel for those who may follow their "advice" out of desperation.