Check your DD level

Ceejay3000

I'm on an Octopus variable tariff and, despite the reductions in prices recently, my DD hasn't been reduced and am significantly in credit. Even going to the 'adjust Direct Debit' page gave a recommendation of the same amount I was currently paying.

However going to the Octopus 'Balance Forecast' tool this gave a recommendation of some £60 lower per month to keep my account balance at recommended levels through the year.

Going back to the DD page I entered a figure for a reduction of £48 per month (to play safe) and it was accepted.

This is a significant reduction and accepted by the website without issue. It does beg the question why, if their own tools show people are overpaying, they aren't reducing the DDs themselves.

Anyway, if you are in my situation I would recommend you try it. It could be that Octopus are about to recalculate peoples DDs anyway, but in case they are being a bit tardy there is nothing to lose by getting ahead of the process.

dunstonh

It does beg the question why, if their own tools show people are overpaying, they aren't reducing the DDs themselves.

I dont know their tools but if its based on recent usage then that may explain why. 2022 was a drought year and winter 2023 was very mild.  So, you wouldn't use recent energy use as a guide to future use.

Anyway, if you are in my situation I would recommend you try it. It could be that Octopus are about to recalculate peoples DDs anyway, but in case they are being a bit tardy there is nothing to lose by getting ahead of the process.

Ideally, you have a record of your energy use over multiple years and know from your own figures what you should be paying and don't need to rely on tools which aer usually based on limited data.

Ceejay3000

dunstonh said:

It does beg the question why, if their own tools show people are overpaying, they aren't reducing the DDs themselves.

I dont know their tools but if its based on recent usage then that may explain why. 2022 was a drought year and winter 2023 was very mild.  So, you wouldn't use recent energy use as a guide to future use.

Anyway, if you are in my situation I would recommend you try it. It could be that Octopus are about to recalculate peoples DDs anyway, but in case they are being a bit tardy there is nothing to lose by getting ahead of the process.

Ideally, you have a record of your energy use over multiple years and know from your own figures what you should be paying and don't need to rely on tools which aer usually based on limited data.

Octopus claim their tool, whilst open to getting it wrong, uses a whole range of data including temperature records in your area i.e. much more data than your average user is going to have to hand. Also in a cost of living crisis are people really going to abandon the energy saving tactics they have employed over the last year or so to reduce their bills?

You will note that I didn't take it as low as the tool actually suggested just to allow for the uncertainties, but the point is the DDs have not been reduced despite the recent reductions, and *some* people are running up large surpluses because of this.

People can always increase again if they reduce too much, and in fact Octopus do a recalculation of DD themselves to reset at certain points if you have got it wrong.

If you want to run your account continually in credit with £400+ surpluses that is your choice, but I think most people would rather run it so that the balance is about £0 at the beginning of summer, with negative balances in Q1 and positive balances in Q3.

Ceejay3000

They also have a 'crystal ball' mode which also factors in potential future energy price changes. That suggests even greater reductions in required funding, but I didn't use that as the basis.

QrizB

Ceejay3000 said:

If you want to run your account continually in credit with £400+ surpluses that is your choice, but I think most people would rather run it so that the balance is about £0 at the beginning of summer, with negative balances in Q1 and positive balances in Q3.

Octopus's T&C don't permit negative account balances.

I'm not sure how strictly they enforce them, but it's worth keeping in mind.

https://octopus.energy/policies/terms-and-conditions/ and see para 8.2.1

DougMLancs

Since Octopus make it so easy to adjust your DD amount or have credit paid into your bank account then I can’t really see the problem. If we were to have a colder winter than last year then many customers would rather go into that with too much credit than not enough.

400ixl

For most people they won't be paying a lower DD despite the prices dropping as they won't be getting the £400 from the government this winter. It would only really be cheaper for people where their provider didn't apply it to their credit or reduce their DD for those months.

Ceejay3000

I should say that the tools prediction actually keeps the balance after payment at just above £0 even in the worst months around March/April. So it is abiding by their own rules... and still advising a lower monthly payment than i'm currently paying.

victor2

QrizB said:

Ceejay3000 said:

If you want to run your account continually in credit with £400+ surpluses that is your choice, but I think most people would rather run it so that the balance is about £0 at the beginning of summer, with negative balances in Q1 and positive balances in Q3.

Octopus's T&C don't permit negative account balances.

I'm not sure how strictly they enforce them, but it's worth keeping in mind.

https://octopus.energy/policies/terms-and-conditions/ and see para 8.2.1

That's an interesting requirement. I see Eon Next have a similar one in their T&Cs. I've just set a DD with them to aim for zero balance at the end of a fix next September, which they wouldn't let me do online, but did agree to it by email. It probably means the account will go into a small debit balance by next spring, only to recover over the summer. Will be interesting to see if Eon Next propose increasing the DD to keep the account in credit.

RogerPensionGuy

On a side note, does any utility suppliers pay interest on credit balances?

MattMattMattUK

RogerPensionGuy said:

On a side note, does any utility suppliers pay interest on credit balances?

Not at the moment, but Octopus, EDF and a few others offer variable Direct Debit which means you do not have to carry a balance.