Help with the £400 energy rebate

Novice_investor101

I finally got my 1/2 yearly bill from British Gas. Because I use no gas in the summer months, they reduced my DD to £70pm from next month. They’ll then be refunding me the £66 rebate, so I’ll be paying £4pm. That’s not even enough to cover 1 day’s usage.  

Does the £66 they refund stay as credit on my account? I’m assuming it does otherwise none of this makes sense. I’d also prefer if they just kept the £66 pm as I’ll only end up owing it them due to the increased costs. 

[Deleted User]

Yes, you will credited your normal £70: £4 from you and £66 from the taxpayer.

They are doing it this way to avoid the need for millions of DD reviews.

ariarnia

no it's refunded to your bank account. your bill is credited the full 70 made up of the governments 66 plus your 4. 

they are assuming your direct debit will be set at the amount needed to pay for your annual costs at the october rate (not just winter so it's okay if it's less than what you spend in the most expensive months) so it's not supposed to matter if they give you £400 in your bank account to pay for cost of living expenses or pay it into your bank account via an energy rebate. either way you pay the same amount into your energy account then have £400 to spend.  

the idea is that lots of things have gotten more expensive (not just power) so people should have the choice what to spend the £400 on (heat or food or petrol or debt or whatever) but if they kept it as extra credit on your energy account you would need to reduce your DD to free up cash for elsewhere. 

lots of companies will allow you to make a lump sum payment into your account (so you can just put it back in if you want it as credit on your account until your next bill is due in 6 months) or you can adjust your DD to the level you think it should be at. 

Novice_investor101

That makes more sense, thank you both. 

I’m going to contact BG & ask them to move to billing quarterly & I’ll start sending in gas readings monthly (smart meter isn’t smart). Waiting 6 months to find out if I’d budgeted for the winter properly won’t be much use. 

mmmmikey

Hi - I'm not sure what your current billing arrangement is or how BG operate, but can I just flag up the fact that with EDF (and I believe most suppliers) you pay more for quarterly billing, so I suggest you check this out first.

[Deleted User]

@dolor and @ariarnia - it's actually a confusing setup, hence why you've given these answers.

The media usually report it as £400 credit into your energy account (so normal DD payment + £66 credit increase) but many of the suppliers are saying that they'll take your normal DD and then send £66 as cash into your bank account.

The official government statement is:

"Direct Debit customers will receive the Energy Bill discount automatically as a deduction to the monthly Direct Debit amount collected, or as a refund to the customer’s bank account following Direct Debit collection during each month of delivery"

So either the same as the second option here (as the suppliers seem to suggest most often), or by a temporary modification to the DD amount (which I've not seen anyone yet try), and it seems suppliers are able to choose which they prefer.

In effect though - everyone's energy account should get credited with their normal DD amount, and everyone's bank account should be £400 better off, no matter how the technicalities are worked.

The_Fat_Controller

I have just posted EDF's take on how they are going to do it.

https://forums.moneysavingexpert.com/discussion/6384763/edf-and-the-400-differing-payment-methods#latest

Novice_investor101

mmmmikey said:

Hi - I'm not sure what your current billing arrangement is or how BG operate, but can I just flag up the fact that with EDF (and I believe most suppliers) you pay more for quarterly billing, so I suggest you check this out first.

I’ll check, thank you. My latest bill said my total usage for 12 months would be approx £1100, 5931kWh of gas at £465 & 1390kWh of electric at £557. I’m sincerely hoping they based that using the October prices as that would be affordable. 

pochase

That is not the new SVT. New cost at SVT will be few quid over £1850.

Novice_investor101

I just worked it out using their estimated kWh for the 12 months, which match what i used last year. At October prices:

Standing charges = £273
gas = £889
electric = £723 
total £1885. 

Don’t think my £70pm will cover that! 

I’m genuinely amazed that BG are actually telling me that’s too high, as well.
I’m having the opposite problem to most people, by the look of it - not being charged enough. I’ll be upping my DD from next month. Be interesting to see what Liz Truss has planned. 

[Deleted User]

Novice_investor101 said:

I just worked it out using their estimated kWh for the 12 months, which match what i used last year. At October prices:

Standing charges = £273
gas = £889
electric = £723 
total £1885. 

Don’t think my £70pm will cover that! 

I’m genuinely amazed that BG are actually telling me that’s too high, as well.
I’m having the opposite problem to most people, by the look of it - not being charged enough. I’ll be upping my DD from next month. Be interesting to see what Liz Truss has planned. 

And with the most recent predictions for SVT in January and April - about £2250 (about £185 per month).