Is 8.1 Billion too much for energy firms to hold of customer money?

ArbitraryRandom

dealyboy said:

At the end of the day it's about customer choice (or should be).

If the demand is there for fixed direct debits to spread the estimated cost and this is an informed and free choice then fair enough...

And I think that's the case now. 

Most people seem to prefer to pay for their car/home insurance, phone/line rental, subscription service, tuition fees, prescriptions, council tax, water bills... and energy bills... by instalment rather than upfront - even when paying upfront can save money. 

There are option for people who want to pay a lump sum in advance - and there are options allowing for payment in arrears - but the norm is to pay by instalment to avoid bill shock and debt. 

eta: It does occur to me that energy is the only utility I see people complaining about in this way. Why is that do we think? Is it because it's a relatively high bill (my council tax is higher than my combined energy bill) or because of some other reason?

stu12345_2

ArbitraryRandom 

dealyboy said:

At the end of the day it's about customer choice (or should be).

If the demand is there for fixed direct debits to spread the estimated cost and this is an informed and free choice then fair enough...

And I think that's the case now. 

Most people seem to prefer to pay for their car/home insurance, phone/line rental, subscription service, tuition fees, prescriptions, council tax, water bills... and energy bills... by instalment rather than upfront - even when paying upfront can save money. 

There are option for people who want to pay a lump sum in advance - and there are options allowing for payment in arrears - but the norm is to pay by instalment to avoid bill shock and debt. 

eta: It does occur to me that energy is the only utility I see people complaining about in this way. Why is that do we think? Is it because it's a relatively high bill (my council tax is higher than my combined energy bill) or because of some other reason?

council tax.rent etc is a known fixed price per yr.but energy bill is  unknown until you actually use it.hence nobody wants to pay in advance more than they actually use.
energy companies need cashflow or they go bust.
so they can't allow folk to use more than they paid for.
imo the solution is bill  monthly max .maybe even fortnightly.in the same way rent is charged in order to not fall behind too quickly 

subjecttocontract

I'm a few hundred quid in credit, pretty much what would be expected this time of year. I don't see any problems with it. This is someone trying to find a problem that doesn't exist.

QrizB

stu12345_2 said:

imo the solution is bill  monthly max .maybe even fortnightly.in the same way rent is charged in order to not fall behind too quickly 

With rent you pay a deposit then pay in advance.

If it bothers you that much, switch to prepayment. You can keep £5 credit on each of gas and electricity and be comfortable in the knowledge that Big Energy isn't making a fortune out of your credit balances.

But I'm sticking with fixed DD and occasionally requesting a refund.

stu12345_2

subjecttocontract said:

I'm a few hundred quid in credit, pretty much what would be expected this time of year. I don't see any problems with it. This is someone trying to find a problem that doesn't exist.

that few hundred quid could be in an interest bearing short term  cash account making you money.
in the same way the energy companies are enjoying your money.

ArbitraryRandom

stu12345_2 said:

ArbitraryRandom 

dealyboy said:

At the end of the day it's about customer choice (or should be).

If the demand is there for fixed direct debits to spread the estimated cost and this is an informed and free choice then fair enough...

And I think that's the case now. 

Most people seem to prefer to pay for their car/home insurance, phone/line rental, subscription service, tuition fees, prescriptions, council tax, water bills... and energy bills... by instalment rather than upfront - even when paying upfront can save money. 

There are option for people who want to pay a lump sum in advance - and there are options allowing for payment in arrears - but the norm is to pay by instalment to avoid bill shock and debt. 

eta: It does occur to me that energy is the only utility I see people complaining about in this way. Why is that do we think? Is it because it's a relatively high bill (my council tax is higher than my combined energy bill) or because of some other reason?

council tax.rent etc is a known fixed price per yr.but energy bill is  unknown until you actually use it.hence nobody wants to pay in advance more than they actually use.
energy companies need cashflow or they go bust.
so they can't allow folk to use more than they paid for.
imo the solution is bill  monthly max .maybe even fortnightly.in the same way rent is charged in order to not fall behind too quickly 

You don't pay in advance for more than you will use over the 12 months if you pay attention to your average usage and check your DD lines up with your expected total. If you think your DD is too high then get it changed and if you are unhappy with your credit balance ask for it to be refunded - but expect to have to base your request on actual hard data, not that you 'think' it's too high.  

If you are about to say 'customers shouldn't be expected to work that out' - then please remember advocating paying monthly means customers may face £50 bills in summer and £200+ in winter... so they had better be able to monitor their use and work out what it means in terms of billing. 

subjecttocontract

stu12345_2 said:

subjecttocontract said:

I'm a few hundred quid in credit, pretty much what would be expected this time of year. I don't see any problems with it. This is someone trying to find a problem that doesn't exist.

that few hundred quid could be in an interest bearing short term  cash account making you money.

It certainly could but, I'm quite wealthy and don't need any more money. I'm not looking to wring every last pound out of my day to day expenditure. I'm happy to leave it where it is and by the middle of next year it will probably have all been used up. Obviously if you are in need of your overpayment then you should contact your supplier and ask for a refund.........It should be quite straightforward.

What I don't need is someone trying to re-arrange my day to day finances for me. Why don't you just deal with your own problems ?

matelodave

I use about £60-70/month in the summer and £350-£400 in both December and January but I'd rather that was shared out a bit more evenly throughout the year by paying my £175 a month DD.

I could faff around trying to accumulate the buffer during the summer by putting the excess into a saving account and then paying it out during the winter but TBH its a lot easier to let the energy company get on with it.

 I'm several hundred in credit at the moment but that will have all run out and I expect to be in debit come Feb/March but my account should balance over the 12 months assuming that the energy co don't  start mucking around with the DD like Scottish Power used to.

alicef

Having cast an eye on this thread I decided to switch to a variable DD from fixed.  I sent an email today (Saturday) and got one back a couple hours later saying 'all sorted'.  It is quite disconcerting after 18 months, give or take, to be with a supplier that a) actually responds to a comms and b) does so in a very timely manner.   

Thank you Octopus.

I still haven't had even an acknowledgment from BG about my complaint about their closing read after nearly 3 weeks. 

superkoopauk

Don't forget Ofgem looked at suppliers direct debit processes last July

https://www.ofgem.gov.uk/publications/ofgem-requires-improvements-energy-suppliers-customer-direct-debits

As part of this they should have uncovered any issues with excessive credit balances being held

Not sure if any of the weaknesses uncovered were actually sorted though!

Also not sure why Ofgem are reporting £8.1bn over three months when they get monthly snapshots reports on credit balances from suppliers.   Surely they are not just adding up the three months which would be triple counting?