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

Spoonie_Turtle

Mstty said:

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...

… In fact everyone is in debit for their first ever month of energy bills on DD. It really does depend on your starting point.

I don't know which other suppliers take a month's payment upfront but Octopus certainly do.  Bulb did as well.

Mstty

Spoonie_Turtle said:

Mstty said:

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...

… In fact everyone is in debit for their first ever month of energy bills on DD. It really does depend on your starting point.

I don't know which other suppliers take a month's payment upfront but Octopus certainly do.  Bulb did as well.

Thanks for this interesting👍

But potentially incorrect for all customers as evidences below in chat from another customer.

MWT

Spoonie_Turtle said:

I don't know which other suppliers take a month's payment upfront but Octopus certainly do.  Bulb did as well.

When you first switch to a new provider most of them will want to take the first DD ASAP, once you are properly switched and everything is working you can then vary your DD with Octopus and I'm sure others.

TheElectricCow

Spoonie_Turtle said:

Mstty said:

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...

… In fact everyone is in debit for their first ever month of energy bills on DD. It really does depend on your starting point.

I don't know which other suppliers take a month's payment upfront but Octopus certainly do.  Bulb did as well.

Interesting, when I switched to Octopus at the end of November they weren’t interested in taking any money until January, not sure if the government payments would have impacted this though as that left my account in credit at the time of the first bill.

BikingBud

MWT said:

BikingBud said:

Especially as unlike quarterly billing so many will be paying against an estimate. 

That is entirely in the hands of the customers...

Can supply a manual reading whenever they want with most suppliers, or just install a smart meter, the vast majority of which will work just fine to deliver accurate meter readings.

Yes and we know there is a whole world of difference and understanding between those who come one here and the chattering masses.

We constantly see that people consider their DD is their bill and cannot separate money paid and energy consumed. This failed assumption is being exploited.

MWT

TheElectricCow said:

Spoonie_Turtle said:

Mstty said:

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...

… In fact everyone is in debit for their first ever month of energy bills on DD. It really does depend on your starting point.

I don't know which other suppliers take a month's payment upfront but Octopus certainly do.  Bulb did as well.

Interesting, when I switched to Octopus at the end of November they weren’t interested in taking any money until January, not sure if the government payments would have impacted this though as that left my account in credit at the time of the first bill.

I suspect that the biggest influence is the speed of switching these days.

There used to be a much longer gap between requesting and completing the switch so there was time to setup and process a DD while that was going on, but now you can switch in a couple of days so inevitably the DD will come after that...

BikingBud

matt_drummer said:

Paying three months in arrears is ok when the energy retailers can set their own prices.

Once their profits are capped at less than 2% paying three months in arrears is a ridiculous concept.

Many people think that because energy costs are more than they have ever been it gives them the right to behave like a customer at a multi Michelin starred restaurant.

These companies make very little, £50 a year on an `average' bill and now we want to pay three months in arrears with 28 days to pay.

Really?

Why does being able to set their own price make a difference? Profit is profit!

What a bizarre comparison with a restaurant. For many this is not even in their thoughts never mind ambition. But if you did feel the need, you would expect to pay when you have finished your meal, not when you booked and not by monthly instalments based on an estimate of 2 people eating an average meal, only to get a reconciled bill at some time after the taste and experience has long since passed.

£50 per year is still £50 per year, as you seem to have a very close affiliation with the companies how closely are the accounts audited by the way? It would not be the first time accounts included some wonderful figures.

matt_drummer

BikingBud said:

matt_drummer said:

Paying three months in arrears is ok when the energy retailers can set their own prices.

Once their profits are capped at less than 2% paying three months in arrears is a ridiculous concept.

Many people think that because energy costs are more than they have ever been it gives them the right to behave like a customer at a multi Michelin starred restaurant.

These companies make very little, £50 a year on an `average' bill and now we want to pay three months in arrears with 28 days to pay.

Really?

Why does being able to set their own price make a difference? Profit is profit!

What a bizarre comparison with a restaurant. For many this is not even in their thoughts never mind ambition. But if you did feel the need, you would expect to pay when you have finished your meal, not when you booked and not by monthly instalments based on an estimate of 2 people eating an average meal, only to get a reconciled bill at some time after the taste and experience has long since passed.

£50 per year is still £50 per year, as you seem to have a very close affiliation with the companies how closely are the accounts audited by the way? It would not be the first time accounts included some wonderful figures.

All I am saying is that they don't make much per customer and some people seem to expect a lot for their money, in my view, more than they would expect from most other services.

I think most of the energy companies allow customers to pay on receipt of a bill?

Why don't those that have an issue with being in credit with an energy company just opt for pay on receipt of a bill?

Then the problem is solved?

I guess that would be because it is more expensive to do that?

I get the impression that some people feel they should get the lowest prices and be in debt to the energy company?

Chrysalis

matt_drummer said:

Paying three months in arrears is ok when the energy retailers can set their own prices.

Once their profits are capped at less than 2% paying three months in arrears is a ridiculous concept.

Many people think that because energy costs are more than they have ever been it gives them the right to behave like a customer at a multi Michelin starred restaurant.

These companies make very little, £50 a year on an `average' bill and now we want to pay three months in arrears with 28 days to pay.

Really?

Well that happened long after FDD was introduced. In addition the cap was only for SVR.  Up until the crisis fixed deals were very popular.

https://www.ofgem.gov.uk/sites/default/files/docs/2020/07/ofg1102_price_caps_explained_easyread.pdf

VADD isnt 3 months in arrears. My VADD goes out 2 weeks after the bill is issued.

The cap is also higher than the quoted figure for SVR customers as there is a inefficiency margin included. Octopus use that margin to reduce the SCs for their customers.

Chrysalis

MWT said:

BikingBud said:

Especially as unlike quarterly billing so many will be paying against an estimate. 

That is entirely in the hands of the customers...

Can supply a manual reading whenever they want with most suppliers, or just install a smart meter, the vast majority of which will work just fine to deliver accurate meter readings.

Sadly this doesnt seem to necessarily affect their annual usage estimate, I quoted the annual estimate in the Octopus tracker thread for my account.

On FDD the DD amount may have little linkage to the actual bill size.  The bill size only properly affects VADD.

So some figures for you MWT.

In my welcome email for when I changed my tariff last week, this is in the email.

Annual usage
Electricity     3,221.7 kWh

However looking at my smarrt meter data for the past year I have consumed in the last 12 months is 2201 KwH. 

Back when Octopus had their beta feature up which showed their calculations per month, it reported they assume as per typical usage patterns usage increases in the winter so as such they dont actually use your previous history fully, but look at summer usage then apply a modifier in the winter months, as I fall outside of that typical usage pattern its broken down.  The prediction isnt as crazy as it was last year though.

So on FDD even if you on a smart meter or supplying regular readings, the 12 months usage will still be an estimate for calculating the size of your payments

I am not an anomaly, there is reports across the internet of whacked cost predictions.  Cabinet ministers have recognised this issue and informed the suppliers to improve the deviation, as well as making more frequent estimation adjustments as some were only doing it as little as once per year.