Standing Order means lower bills.

MattMattMattUK

lsur02 said:

A couple of points here regarding the direct debit calculations.

They are based on the estimated use over the coming year.  This is invariably on the high side even under normal circumstances but will be even higher given the huge increase in the price cap. 

In most cases they are accurate within 5%, where they might not be is if someone makes a significant reduction in usage, however if one tells their provider they will take account of that. The monthly fixed Direct Debit will reflect the cost over the next twelve months, taking account of projected price fluctuations, that is what it is supposed to do and required to do by the regulator.

lsur02 said:

The companies are using the price cap not as a maximum for those using using that amount or more, but more as a minimum figure for all of us. DD levels will reflect this and continue to rise way above actual usage.  They will never be reduced.

The companies are using the unit rates to calculate the future twelve months costs based on the previous twelve months usage, it is fairly simple. Direct Debit payments will rise to reflect the increases in cost. They will be reduced if/when prices and/or consumption drops to a level which means annualised total cost drops.

lsur02 said:

Many pople cannot pay based on the year's estimate as they are struggling to pay here and now.  Pensioners, low income families. claimants and so on cannot pay the excessive DD in the hope that they will save 5% in a year's time.

That is another issue, but if they lower their summer payments then their winter payments will rise due to not flattening them by averaging them over the year. The Direct Debit payments are not excessive, they are a reflection of one twelfth of the annual cost, building up credit in the warmer months to use in the colder months.

lsur02 said:

The whole system is the result of failure by Tory 'sell off public assets for private profit'. philosophy, from M. Thatcher on, and we are now paying the price.

The system is a failure of every government we have had for 50+ years who failed to build large numbers of nuclear plants to ensure energy security. The advantage of that and why people voted for it again and again is that for 50+ years it meant lower taxes and cheaper energy. However even now people are unwilling to support investment in energy security. 

lsur02 said:

Pay by SO and you 'take back control' of your monthly expenses.  A year is too long to wait to save 5%!

Oh great, a three word slogan, that will solve everything, especially that one which is associated with a disaster of a exercise in economic self-harm. People can take control of their monthly expenses with Direct Debit, wither annualised or monthly whole bill, what they will not do however is save anything. With almost all suppliers paying by Standing Order will cost them an additional 5-7% and there is no saving in paying what one uses in each month anyway, all it means is higher payments in winter and lower payments in summer, however the overall total is the same.

Section62

jimexbox said:

 
Your idea is great in the summer....

It isn't ever great for consumers whose energy supplier has lower rates for people paying by DD.

The idea would only make sense for people whose supplier charges the same for SO as they do for DD, who have the personal ability to budget their energy bills themselves, and do something productive with the money 'saved' between the time it would have been paid to the energy company, and when it is actually paid.

And anyone who fits the latter two descriptions would be better off opening a Santander 123 current account (if they don't have one already) and paying for their energy by DD to earn an additional 2% cashback.  The 2% cashback trumps virtually any other "saving" it might be possible to make by gaming the method of paying for your energy.

Unfortunately the OP is trying to convince other people he is right, without understanding how he is wrong.

k_man

Section62 said:

jimexbox said:

 
Your idea is great in the summer....

It isn't ever great for consumers whose energy supplier has lower rates for people paying by DD.

The idea would only make sense for people whose supplier charges the same for SO as they do for DD, who have the personal ability to budget their energy bills themselves, and do something productive with the money 'saved' between the time it would have been paid to the energy company, and when it is actually paid.

And anyone who fits the latter two descriptions would be better off opening a Santander 123 current account (if they don't have one already) and paying for their energy by DD to earn an additional 2% cashback.  The 2% cashback trumps virtually any other "saving" it might be possible to make by gaming the method of paying for your energy.

Unfortunately the OP is trying to convince other people he is right, without understanding how he is wrong.

There is also the half truth, which leads to this confusion:

Payments based on monthly DD estimates during the summer are indeed for more than the cost of energy used during that month.

This is not the same as being billed for more than actual usage.

As previous suggested:
Alternate title:
Fixed Direct Debit means lower bills (okay, payments) in winter

dunstonh

lsur02 said:

A couple of points here regarding the direct debit calculations.

They are based on the estimated use over the coming year.  This is invariably on the high side even under normal circumstances but will be even higher given the huge increase in the price cap. 

The companies are using the price cap not as a maximum for those using using that amount or more, but more as a minimum figure for all of us. DD levels will reflect this and continue to rise way above actual usage.  They will never be reduced.

Many pople cannot pay based on the year's estimate as they are struggling to pay here and now.  Pensioners, low income families. claimants and so on cannot pay the excessive DD in the hope that they will save 5% in a year's time.

The whole system is the result of failure by Tory 'sell off public assets for private profit'. philosophy, from M. Thatcher on, and we are now paying the price.

Pay by SO and you 'take back control' of your monthly expenses.  A year is too long to wait to save 5%!

You are completely and utterly wrong.     You are taking different things and linking them.

A couple of points here regarding the direct debit calculations.
They are based on the estimated use over the coming year.  This is invariably on the high side even under normal circumstances but will be even higher given the huge increase in the price cap. 

Estimates are estimates. Not actual use.    The recommended amount to set your DD is just a recommendation.  You do not have to accept it and Bulb have the option online for you to edit the amount you want to pay.  

The companies are using the price cap not as a maximum for those using using that amount or more, but more as a minimum figure for all of us. DD levels will reflect this and continue to rise way above actual usage.  They will never be reduced.

Your understanding and conclusion are completely wrong

Your actual use will dictate the amount you pay.    How you choose to pay for it won't change the amount you end up paying at the end of the day.  The suggested direct debit amount is just based on an estimate that will not match reality.  But no more different to the estimated amount you choose to pay by standing order.

For example, if you log into bulb and input £160 as your direct debit amount or set up a standing order for £160, then you are paying the same amount towards your energy.  Whether that amount is too little or too much has nothing to do with the method of payment.

Pensioners, low income families. claimants and so on cannot pay the excessive DD in the hope that they will save 5% in a year's time.

So, your recommendation is going to hurt them harder by making them pay more.

The whole system is the result of failure by Tory 'sell off public assets for private profit'. philosophy, from M. Thatcher on, and we are now paying the price.

It is a failure of Labour's energy policy in 2008 which was not changed by the coalition government when they were in power or any of the Conservative ones that followed.  That reduced the UK's capacity and moved us towards renewables before we were ready.          The current pricing is due to most European countries believing they could outsource energy supply.    

Blaming the tories for global supply issues is just daft.  You need to look at the wider picture and if you did, you would realise that there is plenty of blame to go around and its cross party and largely inevitable regardless of what they UK did.

And, as it happens, the actual utility companies are little different to what they were when they were nationalised and they are not making any profit at the moment.   

lsur02

dunstonh said:

Estimates are estimates. Not actual use.    The recommended amount to set your DD is just a recommendation.  You do not have to accept it and Bulb have the option online for you to edit the amount you want to pay. 
Your actual use will dictate the amount you pay.    How you choose to pay for it won't change the amount you end up paying at the end of the day.  The suggested direct debit amount is just based on an estimate that will not match reality.  But no more different to the estimated amount you choose to pay by standing order.

For example, if you log into bulb and input £160 as your direct debit amount or set up a standing order for £160, then you are paying the same amount towards your energy.  Whether that amount is too little or too much has nothing to do with the method of payment.

Pensioners, low income families. claimants and so on cannot pay the excessive DD in the hope that they will save 5% in a year's time.

So, your recommendation is going to hurt them harder by making them pay more.

This is the reason for setting up the standing order originally - Bulb invite cutomers to change the DD amount but there is a minimum they allow.  In my case, it is twice what I currently use.  It cannot be reduced further - I have tried (as I pointed out earlier in the discussion.) When queried, Bulb actually then agreed to my setting up the SO and sent me the bank details to do so.  It's wrong to say you can alter the DD amount with Bulb as it will not go below a certain amount - try it and see.

It's factually wrong to say all payments are an estimate.  I pay for what I actually use monthly according to meter readings and Bulb's monthly statement.  It is an actual amount, not an estimate.  The DD is an estimate but the SO payments are not, they are the previous month's metered usage.

It has to do the excessive estimate which determines the DD.  Paying by SO means paying for current usage and can be changed easily if required, by the customer not by the supplier.

Regarding pensioners and others on low incomes, they are tied into high DD payments based on high estimates. They have to worry about ongoing payments, not whether they will get 5% discount for an inflated DD payment in a year's time. A SO gives control over immediate finances to the customer based on immediate usage.  It is ideal for those living with immediate financial choices, a situation which this government has pushed many into

lsur02

I repeat my last comment by way of summing up.  I hope none of you find the energy bill is excessive every month as prices and estimates based on those prices increase.  If you do, consider a SO as a better way to pay.

My last comment then:

'Regarding pensioners and others on low incomes, they are tied into high DD payments based on high estimates. They have to worry about ongoing payments, not whether they will get 5% discount for an inflated DD payment in a year's time. A SO gives control over immediate finances to the customer based on immediate usage.  It is ideal for those living with immediate financial choices, a situation which this government has pushed many into.'

Feel free to have the last word amongst yourselves

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lsur02

MattMattMattUK said:

lsur02 said:

Section62 said:

If more money has been direct debited than is required to pay for energy, that money is still yours.  And in many cases if you want it back you can just ask for it to be returned to your bank account.

Your thread title is misleading and by continuing to make claims such as "I am being charged twice as much..." you are risking spreading misinformation which could.lead others into making very poor choices about the way they pay for their energy.

I still have to ask for it and notall companies are straight forward in the repayment. 

If you have a credit you can ask for it. All the energy providers are relatively straightforward, the only time they will generally now allow a credit refund is when the Direct Debit payments are lower than current usage and repaying the credit would mean the customer would be in debt after the next bill.

lsur02 said: 

The title is perfectly good.

The title is factually incorrect. 

lsur02 said:
A bill is what one is being charged, in this case on a monthly basis.  

No it is not. You do not get to redefine a term, then claim everyone else is wrong because they do not agree with your redefinition. 

lsur02 said:
The DD has a minimum amount and Bulb do not allow any lower figure to be set.  

You keep saying this, but provide no specifics. Bulb make no mention of "minimum Direct Debit" payments. They do say that if you want to pay by fixed Direct Debit then it needs to be reflective of annual usage, or you can opt to use a variable Direct Debit and pay your bill in full every month.

lsur02 said:
The current figure is twice what I am using based on meter readings and Bulb's own monthly statement to me.  

You have previously said you don't know what your energy usage is, so which is it, you either know, in which case it will be on your bill and you can tell us the figures, or you do not, in which case you do not know if you are correct or not.

lsur02 said:
By using SO, I pay what I use not the double sum they take.

You have said you do not know what you use, so how can you be sure

I have the yearly  figure but not to hand first thing on a bank holiday morning .  More relevantly, I know the monthly amount because I read the meter and Bulb confirms the amount used in the monthly statement.  That's what I pay month by month.

pochase

Just checked that you had the same wild theory already in May in the "Banking" area of the forum.

https://forums.moneysavingexpert.com/discussion/6360492/standing-order-to-replace-direct-debit/p1

And already there people tried to explain to you that you are wrong, so why do you bring up the same wrong assumption back here.

If you would be really worried about peoples money you would not give an advise that will cost most people a lot of money.

If you would care, you would advise to go for a variable direct debit, you only pay what you owe, which you are saying you will do when the high bills arrive.

That you insist on a payment form that might cost people several hundred pound in real money for doubtful satisfaction of paying less in summer, and very high bills in winter shows to me that you either don't understand the information people are giving you, or that you enjoy it when people lose money due to your "advice"

EssexHebridean

Ok - so it seems that the best thing to do is for those of us who do actually care about people being misled by the OP’s lack of comprehension to add a nice bold summary of our own. 

Readers - please be warned that the title of this thread is at the very least misinformation. Following the OP’s advice WILL cost you more money, not less. Best advice if you are concerned about a monthly direct debit payment being too high is to switch to “variable direct debit” where you pay the whole amount of each bill shortly after that bill arrives. Please note however that using this method requires a right grasp on your household budget and the discipline to set aside money in warmer months against extremely high bills in the colder weather. 

[Deleted User]

Perhaps the mods could do some moderating and close this thread down. I cannot believe that it has reached 9 pages.