Octopus Budget Forecast

Possetjohn

pete-20-11 said:

Possetjohn said:

Hello,

I am with Octopus energy and I received an email last night say they were putting my direct debit up from £180 to £199.11. I kept pretty detailed information on consumption but I have smart meters sending information to Octopus. On 7th February I had a credit balance of £371.54 and if the consumptions to the 7th May are similar to last year I estimate the balance will be about £170. Their balance tool is still using consumption figures which are too high, but it is now much better than it was in 2022. Generally though I have to applaud Octopus on the accuracy of their billing and excellent customer service. 

The interesting thing about their balance forecast tool is their model is forcing you to be credit just before they take the direct debit payment. As my payments are normally taken around the 27th and the bill is on the 7th of the next month that means I will be about one month direct debit in credit always. I was always under the impression you should have a zero balance at the bill at the end of April/early May. If you extrapolate this across all of Octopus' customers it is a lot of money in their bank accounts.

Interested in anyone's thoughts on this. 

I believe there is a requirement to always be in credit in the terms and conditions 

so you need to be in sufficient credit before the dd is applied and before the bill is taken. 

You can change the dd date I think, if that helps with cash flow. 

Yeah, I think around April/May time be near zero and then the balance should start to build up again ready for next winter. 

There is the option of variable direct debits if you don’t want a fixed monthly price, just pay for what you use each month and keep some money in savings ready for the bigger winter bills.

sadly I can’t use the balance forecaster as I am on a smart tariff for electric, have a gas tracker tariff and export solar - it would be just too complicated for them to work out. I’m struggling to work it out too, I’m hoping a direct debit of £25 a month will be about right, anything better than that a bonus (but obviously a big “capital” expense in the purchase of the solar and battery!) 

Thanks Pete,
I have checked for that in the terms and conditions.
"8.2.1 (i) you should keep your account in credit and (ii) we will track and carry the balance forward to the next month's Statement of Account;"
To me that implies you should be in credit at the statement date, not all the way through the month. But the Balance Forecast indicates something different.
However it is only people like us who would really be aware of going into deficit between statements. Most "normal people" would just look at the balance on the monthly bills/statements.
I will look at changing the DD date

pete-20-11

I think (i) needs to be read on its own, that’s normally how things work with contracts.

one could argue title says should not must though 😄

FreeBear

Possetjohn said: I have checked for that in the terms and conditions.
"8.2.1 (i) you should keep your account in credit and (ii) we will track and carry the balance forward to the next month's Statement of Account;"
To me that implies you should be in credit at the statement date, not all the way through the month.

"Should" is only a recommendation, not a mandatory requirement.

I'm currently showing a ~£100 deficit on my account as the (first) bill has been generated a couple of days ahead of when Octopus take the DD out of my bank account.

EssexHebridean

I think they disregard debit figures when a pending payment will correct things.

We’ve only lived in our current house for 5 months - when we first moved in the balance tracker was way out for us - we carried our Octopus account and it’s credit straight across from our previous property, and as that was a 2 bed flat with E7, electric heating and just using gas for cooking, and this is a 3 bed house which previously had 3/4 occupants, has gas central heating and uses electric for cooking, by Octopus’s own admission they were struggling to forecast what we would use! As a result, although I’ve kept an eye on the balance tracker, I chose my own DD level (roughly based on their original suggested amount) and have been able to slightly reduce that to this point - we are currently still in an amount of credit which is technically slightly higher than we should be - this suits me at the moment though. I’ve found that I could simply adjust the DD as needed, at one stage I got a “we’re changing your DD” email - I simply adjusted it back to where I wanted it with no issues. I do wonder if this works differently for different people though rather than being applied precisely the same across the board - it could well be that your account history has a bearing. 

Spoonie_Turtle

Adjusting DDs online also appears to require you to have a certain amount of credit on your account - X months' worth based on your current DD amount.  In my experience I think it's been about 2 months' worth but it could have been 3, I can't quite remember.

(I don't think I have the forecast tool because I'm on Tracker.)

Organgrinder

I think if I can i'll go on variable DD but put my monthly payment into a savings account and upon notification of the DD just move that money into my current account.

At the moment I'm still £320 in credit. Bill goes is on 25th, current fixed monthly DD on 28th. Ok I'll probably only benefit by £10 or so a year but it's the principle more than anything. 

Costsavingexpert

I've just discovered this thread, and many of the comments are still relevant. My Octopus forecasts always show me in credit. When did it become 'law' to always be in credit? I can remember the days when paying by DD meant that you would get a bill, and then pay in full by DD 30 days later.
I have recalculated the Octopus forecasts based on 'last years usage at this years prices' and I cannot get anywhere near the Octopus forecast figures. I would like Octopus to disclose the formula they use for forecasts.
And by the way, try getting a refund or reduction in DD amount.

TheElectricCow

Costsavingexpert said:

I can remember the days when paying by DD meant that you would get a bill, and then pay in full by DD 30 days later.

This is called a "variable Direct Debit", and Octopus will allow you to pay this way if you ask them! (it may not be 30 days, I don't recall exactly, but the principle is exactly the same - You get a bill and the full balance is collected by DD some weeks later).

Costsavingexpert said:

And by the way, try getting a refund or reduction in DD amount.

You should be able to do both of these things in the "Payments" section of your online account without needing to contact Octopus, although you may have to hold above a certain balance to request a refund online.

MikeJXE

Costsavingexpert said:

I've just discovered this thread, and many of the comments are still relevant. My Octopus forecasts always show me in credit. When did it become 'law' to always be in credit? I can remember the days when paying by DD meant that you would get a bill, and then pay in full by DD 30 days later.
I have recalculated the Octopus forecasts based on 'last years usage at this years prices' and I cannot get anywhere near the Octopus forecast figures. I would like Octopus to disclose the formula they use for forecasts.
And by the way, try getting a refund or reduction in DD amount.

I have done both this month and both successful, my DD is still a few £ above what they recommend 

You have to be sensible in what you ask for and know by your history what they are not likely to refuse 

Gerry1

Costsavingexpert said:

My Octopus forecasts always show me in credit. When did it become 'law' to always be in credit?

Apparently Ofgem is to blame.  Previously it was swings and roundabouts with Fixed DDs, sometimes you were in credit, sometimes you were in debit.

The idea is to prevent a nasty surprise if you switch suppliers, only to find your DD hasn't kept up with your actual usage and you have to pay a large amount all in one go.

The downside is that the suppliers can inflate the DD and build up a handy mountain of cash.  Dodgy suppliers relied on this as a business model and around 30 went bust when wholesale prices rocketed after Putin invaded Ukraine.