Refund or lower direct debit...?

fdl8

I am approx. £590 in credit on my British Gas account (gas and elec). They've told me I'm using around £180 per month so have reduced my DD to £129 per month to account for the credit, which I assume will then need to increase again once the credit is used up; upon asking for my options, they said I can have a £500 refund and increase the DD to £180. What would you do? I'm not sure what is going to happen at the next price cap review in October and what impact this will likely have on me... Thanks in advance!

[Deleted User]

Hi,

what is your DD just now, are you happy to take the £500 now and use it wisely, then DD up to £180, maybe more come winter usage, the refund  could give you a nice wee holiday abroad in the sun, though could be a cold winter at home.

[Deleted User]

I'm not sure what is going to happen at the next price cap review in October and what impact this will likely have on me..

This is what Cornwall Insight thinks will happen but they cannot control World events. The present cap is £2074.

If you take the £500 out, you will end up paying it back over time. I am happy to run a modest energy credit balance (enough to pay my next bill) alongside an energy savings account which pays 3.8% so, if necessary, I can make a top up.

Petriix

I had a very similar question with Octopus. I decided to take a £450 refund on the grounds that I'm now earning over 4% interest on the money I have 'lying around' so it's better in my bank than theirs.

As long as you definitely won't spend it then end up with a debt you can't afford, having access to your own money seems like the better choice. 

Scot_39

EOnNext seem to handle credit differently to EOn - so for me what was once automatic - I had been given refunds back to account - before the paeper statements arrived etc - seemed perhaps to now be user request.  But I didn't know it was there preauthoried for me to manually request it online until looked for an unrelated reason  (DD EBSS £67 clear or not). No emails - nothing on online account summary page - other than the credit itself.  I din't select it then and there - but at the end of the month - button for it was gone - and my DD lowered to use it up.  

Theres no right or wrong answer.

But if leave as DD reduction - make sure you know the step is coming next year and plan accordingly.  The near £50 step when credit clears could easily be on top of all the other things likely to be that bit more expensive next year.

Or take - a nice savings boost / small emergency fund (providing it doesn't conflict with say benefits) plus say £20 in interest pa - or a nice treat for you or family - service or insurance for the car etc.

And more stable monthly outgoing budgetting. Which after all is part of the reason for being on an annualised DD plan anyway. 

And remember BG are earning interest on it too - using in part to fund their business. As Ofgem rejected suggestions the funds be 100% ringfenced - as would increase average consumer costs.

I could probably get it manually - but EOn CS have been painful to deal with on 2 other minor issues.

I do sometimes think wish I had taken the refund - I never think glad I didn't.  

So another vote for refund.

fdl8

frugalmacdugal said:

Hi,

what is your DD just now, are you happy to take the £500 now and use it wisely, then DD up to £180, maybe more come winter usage, the refund  could give you a nice wee holiday abroad in the sun, though could be a cold winter at home.

I was paying £260 until around 2 months ago and then I queried whether I was overpaying so they reduced it to £205 and now with the new price cap they reduced it further to the £129.

As some have said, in some ways it feels better to have my money in my own account and have 'stable' payments that (as it currently stands) won't need to increase in 10-12 months once the credit has gone. If Dolor/Cornwall Insight is right, I don't think the DD will change much.