Should I overpay electricity during £400 loan period?

gandpmudd

Is it a good idea to continue to pay the usual amount on our direct debit for electricity to build up £400 credit rather than pay the reduced amount only?

MWT

Depends entirely on your ability to save the money if it stays in your bank account...

If you prefer to have it stored out of the way with your supplier, then that is the best choice for you.

Ant555

gandpmudd said:

Is it a good idea to continue to pay the usual amount on our direct debit for electricity to build up £400 credit rather than pay the reduced amount only?

My supplier will keep the DD the same but credit my bank with the £66 so its then kind of up to me how I then channel the £400 back into my energy account.  I am probably intending to get the Bills Support £400 into my energy account but I believe I would have to 'up' the DD by £66 for 6 months to see it added to my energy account rather than keep the DD the same.

My situation is in preparing a buffer for coming off a fix in 2023 and a hike in tariff meaning I will be paying a lot more than I have been used to.

armistice

Its not a loan anymore.
Not sure why you would want to hold more than needed in your energy supplies account (assuming your expected annual usage has been accounted for correctly within the existing monthlies) but its your money to do with as you see fit.

gandpmudd

Thank you. I hadn't realised it was now a grant not a loan. Obviously I should not pay the extra to the energy company.

[Deleted User]

gandpmudd said:

Thank you. I hadn't realised it was now a grant not a loan. Obviously I should not pay the extra to the energy company.

 The new EPG cap assumes an annual cost of £2500 per year for the AVERAGE consumer. You need to check that your supplier has set your monthly DD at £208 per month. (I have ignored any credit or debit balances). If the DD set amount is less than £208 per month without good reason, then you could end up going into a debit situation.

FWiW, because of the Government’s late call on the EPG, most suppliers have yet to carryout a full DD annual review: they have just discounted the existing DD payment by £67/66.

My advice: do your own energy calculation based on kWh/year before you spend the £400.

maisie_cat

I am going to pay it back to our energy account. Energy is our single highest outgoing and this is the only help we are likely to get. I find having a decent credit balance makes me far less anxious.

ProDave

I reduced my monthly payment months ago as soon as the £400 was announced.  What I pay each month covers the summer usage plus a bit and the £400 will cover the additional winter usage.  I will review my payments next Spring when I see where we are and what the future predictions are.

[Deleted User]

ProDave said:

I reduced my monthly payment months ago as soon as the £400 was announced.  What I pay each month covers the summer usage plus a bit and the £400 will cover the additional winter usage.  I will review my payments next Spring when I see where we are and what the future predictions are.

You do realise that this probably won't work if you're a DD customer?  The suppliers are either reducing your DD by the £400 or refunding it in cash to your account.

If you pay by direct debit and have already reduced your monthly payment "months ago", then you will probably find that you have £400 debt over the winter.

ProDave

Deleted_User said:

ProDave said:

I reduced my monthly payment months ago as soon as the £400 was announced.  What I pay each month covers the summer usage plus a bit and the £400 will cover the additional winter usage.  I will review my payments next Spring when I see where we are and what the future predictions are.

You do realise that this probably won't work if you're a DD customer?  The suppliers are either reducing your DD by the £400 or refunding it in cash to your account.

If you pay by direct debit and have already reduced your monthly payment "months ago", then you will probably find that you have £400 debt over the winter.

I am with Octopus, a supplier that has pretty good customer service and is approachable.  I agreed the reduction with them earlier in the year with my reasoning.  If they do go into "auto pilot" and reduce my winter DD by £67 per month, I will straight away go and put it back up again, something you are able to do with Octopus.

[Deleted User]

ProDave said:

[Deleted User] said:

ProDave said:

I reduced my monthly payment months ago as soon as the £400 was announced.  What I pay each month covers the summer usage plus a bit and the £400 will cover the additional winter usage.  I will review my payments next Spring when I see where we are and what the future predictions are.

You do realise that this probably won't work if you're a DD customer?  The suppliers are either reducing your DD by the £400 or refunding it in cash to your account.

If you pay by direct debit and have already reduced your monthly payment "months ago", then you will probably find that you have £400 debt over the winter.

I am with Octopus, a supplier that has pretty good customer service and is approachable.  I agreed the reduction with them earlier in the year with my reasoning.  If they do go into "auto pilot" anr reduce my winter DD by £67 per month, I will straight away go and put it back up again, something you are able to do with Octopus.

So you do realise.  Good.