MONTHLY DIRECT DEBITS AND WHAT IS A REASONABLE AMOUNT TO BE IN DEBT IN MAY

MWT

deano2099 said:

dunstonh said:

If you follow you idea of always being in credit you might as well pay the full every time they bill you.  Completely goes again the idea of having a regular monthly payment.  

Monthly payments are there to help people budget.  Not to borrow money from the energy supplier.

It doesn't help people budget if they open an account in November, get hit with a really high direct debit for the winter months (as it has to cover actual usage under your system) and then have that halved in March.
(Or more likely, not halved unless the customer requests it, and then end up £1000s in credit)

It does as long as they don't spend the refund they would get from their previous supplier when they move accounts...

Mstty

MWT said:

deano2099 said:

dunstonh said:

If you follow you idea of always being in credit you might as well pay the full every time they bill you.  Completely goes again the idea of having a regular monthly payment.  

Monthly payments are there to help people budget.  Not to borrow money from the energy supplier.

It doesn't help people budget if they open an account in November, get hit with a really high direct debit for the winter months (as it has to cover actual usage under your system) and then have that halved in March.
(Or more likely, not halved unless the customer requests it, and then end up £1000s in credit)

It does as long as they don't spend the refund they would get from their previous supplier when they move accounts...

What about people that start their energy lives (1st property) in October no previous supplier first home. It does happen not everyone starts their energy account life in the summer.

MWT

Mstty said:

MWT said:

deano2099 said:

dunstonh said:

If you follow you idea of always being in credit you might as well pay the full every time they bill you.  Completely goes again the idea of having a regular monthly payment.  

Monthly payments are there to help people budget.  Not to borrow money from the energy supplier.

It doesn't help people budget if they open an account in November, get hit with a really high direct debit for the winter months (as it has to cover actual usage under your system) and then have that halved in March.
(Or more likely, not halved unless the customer requests it, and then end up £1000s in credit)

It does as long as they don't spend the refund they would get from their previous supplier when they move accounts...

What about people that start their energy lives (1st property) in October no previous supplier first home. It does happen not everyone starts their energy account life in the summer.

Of course, everyone has to start somewhere, but the basis of this shouldn't be an expectation that they can borrow money from their energy supplier to cover the bills...

Boxman

MWT said:

Mstty said:

MWT said:

deano2099 said:

dunstonh said:

If you follow you idea of always being in credit you might as well pay the full every time they bill you.  Completely goes again the idea of having a regular monthly payment.  

Monthly payments are there to help people budget.  Not to borrow money from the energy supplier.

It doesn't help people budget if they open an account in November, get hit with a really high direct debit for the winter months (as it has to cover actual usage under your system) and then have that halved in March.
(Or more likely, not halved unless the customer requests it, and then end up £1000s in credit)

It does as long as they don't spend the refund they would get from their previous supplier when they move accounts...

What about people that start their energy lives (1st property) in October no previous supplier first home. It does happen not everyone starts their energy account life in the summer.

Of course, everyone has to start somewhere, but the basis of this shouldn't be an expectation that they can borrow money from their energy supplier to cover the bills...

Middle of last November my gas account was in credit by around £250. My supplier (EDF) asked for a meter reading then without my requesting refunded this credit balance which I put back into my home budget account, leaving the balance at £0.  They set my dd on a reasonably accurate expected 12 month usage which inevitably meant that I had a debit of about £275 at the end of April but will have a credit balance come the middle of November. Their choice and I am fine with this.

MWT

Boxman said:

They set my dd on a reasonably accurate expected 12 month usage which inevitably meant that I had a debit of about £275 at the end of April but will have a credit balance come the middle of November. Their choice and I am fine with this.

Exactly, their choice, and no reason to complain about that.

Other suppliers may have different expectations, and may include the requirement to keep your account in credit at all times.

We do still have the choice to move to a different supplier if we don't like how they handle these things...

Nelliegrace

If energy companies insist on having accounts in credit all year they should pay the going rate of interest on the money. They are taking advantage of customers by expecting us to pay large sums in advance for the convenience of levelling the payments. It is something new and adds up to a lot of extra profit for the company. 

We could go back to having a bill and paying it on the last day that it is due, and putting the regular amount into savings so we earn the interest. We used to do that when interest rates were last quite good, and we earned a useful amount on our household bills account. 
Now we have a bank account which earns interest and gives cashback on energy bills.

We are paying a twelfth of the latest estimated annual bill by Direct Debit. Some of the estimates were much higher than we have ever used, and we have reduced our energy usage. Our account has always gone into debit over Winter and into credit over Summer. It depends on when the contract starts.

MWT

Nelliegrace said:

If energy companies insist on having accounts in credit all year they should pay the going rate of interest on the money. They are taking advantage of customers by expecting us to pay large sums in advance for the convenience of levelling the payments. It is something new and adds up to a lot of extra profit for the company. 

We could go back to having a bill and paying it on the last day that it is due, and putting the regular amount into savings so we earn the interest. We used to do that when interest rates were last quite good, and we earned a useful amount on our household bills account. 
Now we have a bank account which earns interest and gives cashback on energy bills.

Payment on receipt of bill is still an option, you'll just pay more for your energy if you want to do it that way.

You don't get any interest on your balance with the majority of the suppliers, but you do get a lower price...

Also keep in mind that some do not require you to maintain a high credit balance, just that you remain in credit.

My Octopus account is typically no more than £10-20 in credit after my bill is paid each month, and my DD goes into the account a few days before the bill is due to be paid... not much interest to be made on that level of balance...

wild666

caro69 said:

Ok.  So, traditionally I am sure at the end of Winter beginning of Spring/Summer it was reasonable to be several hundred pounds in debt to your energy provider.  The idea being that over summer credit would build for next Winter.  I am only £19 in debit to Octopus at the moment but they want to raise my DD.  Is this them trying to build their bank balance up rather than mine?  Reasonable or not with energy prices falling as we go through the year, hopefully?

I'm £287 in credit with Octopus and after the government payments ended they increased my DD to £69.25 from £55 even though I was £ 275 in credit. I expect this months bill to be about £71, I could ask for about £200 back but I prefer to use up any credit I have slowly or otherwise. If the debt keeps increasing then pay a lump sum to clear the account and increase the DD or keep the DD the same and pay an extra payment every month so that there is no debt on the account.

Mstty

MWT said:

Mstty said:

MWT said:

deano2099 said:

dunstonh said:

If you follow you idea of always being in credit you might as well pay the full every time they bill you.  Completely goes again the idea of having a regular monthly payment.  

Monthly payments are there to help people budget.  Not to borrow money from the energy supplier.

It doesn't help people budget if they open an account in November, get hit with a really high direct debit for the winter months (as it has to cover actual usage under your system) and then have that halved in March.
(Or more likely, not halved unless the customer requests it, and then end up £1000s in credit)

It does as long as they don't spend the refund they would get from their previous supplier when they move accounts...

What about people that start their energy lives (1st property) in October no previous supplier first home. It does happen not everyone starts their energy account life in the summer.

Of course, everyone has to start somewhere, but the basis of this shouldn't be an expectation that they can borrow money from their energy supplier to cover the bills...

I don't see why not some will be in credit some in debit. In fact everyone is in debit for their first ever month of energy bills on DD. It really does depend on your starting point.

Real world example and to their credit no complaining from Eon Next.

We were shifted from Symbio to Eon Next as SOLR with a £30 credit October 3rd as we were whole bill monthly variable DD.

Eon Next took us on and estimated 7000kwh of electricity and set the fixed DD to £135. They didn't expect the account to be fully paid off til the following October taking the hit over the winter.

vic_sf49

Sea_Shell said:

Historically, we always seemed to come off a fix (and start a new one) in October, just as we were heading into Winter.

They'd set the DD (based on accurate annual usage) and off we'd go.    There was never any mention of adjusting the DD come spring, when we were in debt on the account, because that would get paid off over the summer months, and by the following October we'd be back level.   The whole point of a fixed DD.

It does seem that recently, energy companies have changed tack with no longer allowing debit balances to accumulate, even if your initial DD and usage were all accurately calculated at the start of your contract.

It seems like a move towards pay-as-you-go 'in full' DD's is the way things are heading.    Which may not be a bad thing TBH.   As long as the customer can budget for winter themselves.    Many can't, through a lack of funds or of understanding. 

Thanks for that. I was sure it used to work like that, but then doubted myself.

However, I have no problem with things changing over recent years, although contrary to what the OP would like to happen, I'd prefer to be in credit, so long as they're not forever adjusting the direct debit. That drives me potty. 

Especially when my DD is set to exactly the right amount, based on historical usage. 

Admittedly, it's harder to calculate now I'm on Octopus' Tracker, and after a milder winter, so I'll just make sure I'm in credit, and adjust my own DD.

(Edited for formatting.)