Accruing Credit on Utilities

HollyandCo

I've managed to get through the winter with a tidy credit.  Should I leave my Direct Debit unchanged so that I can build up credit for the next winter?

I am worried about accumilating 500/600£ credit and the utility company going bust.  Have I got any protection from this?  Or should I simply reduce my s/o and save the difference?

Many thanks

Cloth_of_Gold

Personally I would rather the money was in my account than theirs, especially as interest rates are half decent at the moment. Why don't you reduce your DD and put the difference into a savings account and then it will be there for you next winter, with a bit of interest too?

bob2302

HollyandCo said:

I've managed to get through the winter with a tidy credit.  Should I leave my Direct Debit unchanged so that I can build up credit for the next winter?

I am worried about accumilating 500/600£ credit and the utility company going bust.  Have I got any protection from this? 

Yes, see:

https://www.ofgem.gov.uk/information-consumers/energy-advice-households/what-happens-if-your-energy-supplier-goes-bust

"Ofgem’s safety net will protect your supply and any credit balance."

TheElectricCow

Your credit balance will be safe should anything happen to your supplier (this is in part why standing charges have risen so much in recent years, as a portion of this charge contributes to protecting customers credit balances for failed suppliers).

That said, just because the money is safe doesn’t necessarily make it the best choice to keep it there.

It might be worth keeping the money in an interest earning savings account until it’s needed for a bill. In fact many people choose not to hold a credit with the energy company at all and pay off the bill in full each month on what’s known as “Variable Direct Debit”, making sure to save the excess in a separate account for any winter bills. This approach isn’t right for everyone, but if you’re reasonably confident in your ability to budget for the next year’s bills there is a small benefit in doing so.

HollyandCo

TheElectricCow said:

Your credit balance will be safe should anything happen to your supplier (this is in part why standing charges have risen so much in recent years, as a portion of this charge contributes to protecting customers credit balances for failed suppliers).

That said, just because the money is safe doesn’t necessarily make it the best choice to keep it there.

It might be worth keeping the money in an interest earning savings account until it’s needed for a bill. In fact many people choose not to hold a credit with the energy company at all and pay off the bill in full each month on what’s known as “Variable Direct Debit”, making sure to save the excess in a separate account for any winter bills. This approach isn’t right for everyone, but if you’re reasonably confident in your ability to budget for the next year’s bills there is a small benefit in doing so.

Thanks, I will change my set up to this.

Scot_39

You might want to request a refund first if you want the credit back as a lump sum.

As some if not all apparently do / will run your credit down to zero before taking the first monthly variable direct debit payment.

ecraig

HollyandCo said:

I've managed to get through the winter with a tidy credit.  Should I leave my Direct Debit unchanged so that I can build up credit for the next winter?

I am worried about accumilating 500/600£ credit and the utility company going bust.  Have I got any protection from this?  Or should I simply reduce my s/o and save the difference?

Many thanks

Who is your energy company?
What have you read about them to give you concern they might go bust?