Help needed with my situation with EON Next

thetonyshort

Hi,

I seem to be facing some challenges right now with EON Next and would appreciate some other perspectives to help me out as I’m not sure if I’m just long in the tooth here and need to get my head out the sand to take action on this. 

A bit of context, towards the end of last year I cancelled my direct debit after they attempted to increase my monthly payments. I did this down to not being able to afford those increased payments, and instead opted to set-up a standing order with a fixed amount each month.

Since the winter my payment amount isn’t covering the full amounts and as a result I have accrued around £200 debit on my account and now they are threatening escalating my account to a debit collection agency. 

I’m in close communication with them, for example, since March, we have exchanged 5 emails where I’m explaining the motivation of why I opted for standing order and trying to see if they can understand that as we come into spring and summer months that this deficit should get cleared.

In the past, when I’ve been on direct debit it seems that it was accepted that in the winter months our usage was going to be higher and therefore the account would be in debit, though with the theory that in the warmer months the payments sort themselves out due to lower energy usage.

Now I appreciate things have changed, with the energy costs going up so I’m going to have to that into account, that yes, our energy usage might go down in the summer but the costs of energy has increased.

Is it no longer the case with energy companies that seasonal fluctuations in consumption would result in deficits after the winter months and they give the consumer the chance to catch-back up in the warmer months?

Thanks for reading and any views on this would really help

Thanks, Tony

Mark_d

You should not have cancelled your direct debit.  You should have called the supplier and negotiated some form of payment plan.  You should reinstate the direct debit and be paying back a revised amount that additionally covers the debt you built up.

If you are struggling with you spending on energy, maybe your supply can help you by fitting a prepayment meter.

BarelySentientAI

thetonyshort said:

In the past, when I’ve been on direct debit it seems that it was accepted that in the winter months our usage was going to be higher and therefore the account would be in debit, though with the theory that in the warmer months the payments sort themselves out due to lower energy usage.

Is it no longer the case with energy companies that seasonal fluctuations in consumption would result in deficits after the winter months and they give the consumer the chance to catch-back up in the warmer months?

It is entirely the case when you are paying by direct debit.  That's kind of the point of the fixed direct debit thing.  They were putting up the direct debit to avoid exactly the situation that you are now in.

You decided to cancel your direct debit, so that no longer applies to you.  Setting up a standing order doesn't count, because you could change the amount to whatever you want tomorrow and they couldn't do anything about it.

Standing orders count as paying by cash - so its effectively the same as supermarket shopping.  You couldn't tell Tesco that it's ok to have a debt at the moment because you'll buy less next week but still pay them what you did this time.

Scot_39

You have abandoned annualized (I assume) DD payments due to the revised rate calculated by supplier / cost.

But it is difficult if making the increased DD would have caused other debt or even life issues - like inability to pay other bills or meet basic needs like food shopping etc. 

Did you seek out help from say citizens advice or local council etc if struggling financially ?

You very likely then moved to standard credit - which is essentially pay on demand.  

It might not have occurred to you at the time - but there is no winter / summer bill smoothing unless on an annualized DD plan.  Paying the same amount by standard credit as paying on an annualized DD plan - is not the same thing.

Again - and its a hindsight comment now I realise - the more correct approach would have been if you were able (or find a friend/relative who was or even likes of citizens advice / energy help charities etc) - to estimate your own DD level - as firms have been (too regularly for comfort - and by no small payment margin  - from some posts here) been known to ask for too much from some on annualized DD plan reviews.

And call / request they match your reasoned estimate.

Or if they hadn't - and it's not affordable - negotiate some sort of debt help at the time.

Paying by standing order I suspect counts as simply paying towards any such on demand bills in advance - and only 

counts as meeting bills if it fully covers them - or exceeds them.  But I could be wrong.

If your billed monthly - as some now are - three monthly - or even six monthly - that probably means any underpayment - so in this case your Standing Order * x months vs billed amount - almost immediately counts as debt (within weeks of bill in some cases). 

Which I assume you have been issued actual bill (the £200) or was it bills plural depending on duration - was the £200 the first ?

Just as failure to meet an issued bill on standard credit by it's payment due date for the whole amount - not meeting the underpayment as and when demanded by the due date also - very quickly these days counts as debt - weeks not months - and EOn are not slow to put issues to their at least at one time - internal debt team.

Annualised DD not only affords you cheaper rates - the standard credit terms you are now likely on has an Ofgem DF cap currently of £1796 - the direct debit for same energy use £1690 - a difference of £106 - just over 6% more expensive.  

But also inherently allows a fluctuation between summer and winter credit / debit - even if seems biased more to credit than debit these days in many cases - coming out of winter.

EOn were also one of the big suppliers who actually had a very generous discount scheme over the winter for some struggling customers - that gave 25 or in some cases 50% discount - you may have qualified for that or some other aid - that they had available - if negotiated debt terms up front.

https://www.eonnext.com/blog/winter-affordability-support-scheme

In summary

I am afraid the debt is therefore likely to be real - and needs to be dealt with as such.

So paid if able.

Terms negotiated with supplier if not - for both it and future billing levels.  

Although that might inevitably lead to prepayment - but that is now the cheapest payment method - the DF PPM cap £ 1643.  Bit of course has the same problem as anything but annualized DD - the lack of winter / summer smoothing.  OK if disciplined enough to set money aside in bank in summer to pay winter yourself.

Some debt repayment plans - from a few posts here - even for far larger amounts  - as terms have to be "affordable" - come down into just few £s per week.

Only advice would be to seek some real advice from say citizens advice, council or local debt charity adivisor - as I realise it can be pretty daunting - as to how best to handle.  

Remember - there is really no shame in debt - at any time - for those unable to avoid it.  Literally millions are now in arrears with energy companies after 2 years of high bills - and for a lot more than a couple of £100.

thetonyshort

Scot_39 said:

You have abandoned annualized (I assume) DD payments due to the revised rate calculated by supplier / cost.

But it is difficult if making the increased DD would have caused other debt or even life issues - like inability to pay other bills or meet basic needs like food shopping etc. 

Did you seek out help from say citizens advice or local council etc if struggling financially ?

You very likely then moved to standard credit - which is essentially pay on demand.  

It might not have occurred to you at the time - but there is no winter / summer bill smoothing unless on an annualized DD plan.  Paying the same amount by standard credit as paying on an annualized DD plan - is not the same thing.

Again - and its a hindsight comment now I realise - the more correct approach would have been if you were able (or find a friend/relative who was or even likes of citizens advice / energy help charities etc) - to estimate your own DD level - as firms have been (too regularly for comfort - and by no small payment margin  - from some posts here) been known to ask for too much from some on annualized DD plan reviews.

And call / request they match your reasoned estimate.

Or if they hadn't - and it's not affordable - negotiate some sort of debt help at the time.

Paying by standing order I suspect counts as simply paying towards any such on demand bills in advance - and only 

counts as meeting bills if it fully covers them - or exceeds them.  But I could be wrong.

If your billed monthly - as some now are - three monthly - or even six monthly - that probably means any underpayment - so in this case your Standing Order * x months vs billed amount - almost immediately counts as debt (within weeks of bill in some cases). 

Which I assume you have been issued actual bill (the £200) or was it bills plural depending on duration - was the £200 the first ?

Just as failure to meet an issued bill on standard credit by it's payment due date for the whole amount - not meeting the underpayment as and when demanded by the due date also - very quickly these days counts as debt - weeks not months - and EOn are not slow to put issues to their at least at one time - internal debt team.

Annualised DD not only affords you cheaper rates - the standard credit terms you are now likely on has an Ofgem DF cap currently of £1796 - the direct debit for same energy use £1690 - a difference of £106 - just over 6% more expensive.  

But also inherently allows a fluctuation between summer and winter credit / debit - even if seems biased more to credit than debit these days in many cases - coming out of winter.

EOn were also one of the big suppliers who actually had a very generous discount scheme over the winter for some struggling customers - that gave 25 or in some cases 50% discount - you may have qualified for that or some other aid - that they had available - if negotiated debt terms up front.

https://www.eonnext.com/blog/winter-affordability-support-scheme

In summary

I am afraid the debt is therefore likely to be real - and needs to be dealt with as such.

So paid if able.

Terms negotiated with supplier if not - for both it and future billing levels.  

Although that might inevitably lead to prepayment - but that is now the cheapest payment method - the DF PPM cap £ 1643.  Bit of course has the same problem as anything but annualized DD - the lack of winter / summer smoothing.  OK if disciplined enough to set money aside in bank in summer to pay winter yourself.

Some debt repayment plans - from a few posts here - even for far larger amounts  - as terms have to be "affordable" - come down into just few £s per week.

Only advice would be to seek some real advice from say citizens advice, council or local debt charity adivisor - as I realise it can be pretty daunting - as to how best to handle.  

Remember - there is really no shame in debt - at any time - for those unable to avoid it.  Literally millions are now in arrears with energy companies after 2 years of high bills - and for a lot more than a couple of £100.

What a response, genuinely, thank you for taking the time out and giving me your views and insights. There's a lot of value in your response so will take the time over the coming days to take this into account and take those actions

Thank you again

Brie

This is precisely the sort of thing a budget/debt adviser can help you with.  And in fact may do a better job than if you try to do it yourself.  So StepChange, NationalDebtline, Citizen's Advice, Community Money Advisers (CMA) will be able to help.

It's silly perhaps but most companies take things more seriously usually when there's an official adviser helping you.  In one part it's because they can see that you are taking the situation seriously by getting someone to help you through a difficult patch.

Now if this is your only debt currently it should be quite a simple thing to help you sort.  But, like many of us, there's one thorn that is really bothering us but a few more waiting in the wings.  That's why getting someone who knows all the ins and outs about budgeting and debt is great to enlist.  They will be able to spot what bits of income you might be missing and what expenditures you have that might easily be trimmed.

Should you not want to go down this line I suggest you go to the debt free board and fill out a statement of account (SOA) so you can better examine where things can be improved.  Or post a copy of it on there and the helpful gang will be happy to offer suggestions that you might have overlooked. 

jbuchanangb

One way forward would be to change back to Direct Debit. Calculate your expected energy bill for 12 months at whichever tariff you are now on, add the deficit, divide by 12, and then allow E.ON to reinstate the DD at a suitable amount. 

You should also request a tariff appropriate to paying by DD.

I am currently monitoring my DD situation with E.ON. I was paying £177 per month on their "Next Loyalty 12M Fixed Rate - July 23 Issue 1" tariff. I then changed to their "Next Secure Fixed 12m v4" tariff and THEY changed my DD to £130.42. Shortly after that they asked me to change the DD to £153. Which I did. Less than a month after that, THEY changed the amount to £171.75. On 10 April I had a £94.29 debit balance. I calculated my expected annual bill on the Next Secure Fixed 12m v4 tariff, added the deficit, and the result was that I should be paying £165. HOWEVER, E.ON will not allow me to reduce my DD payment while I have a debit balance. I will probably get into credit scenario in June, then maybe I can reduce the DD amount.