Credit Balances Eon

Kwiss2

Why is it so hard to get refunds for credit balances promptly? Eon make you wait 10 working days and then put up your monthly DD. This is just wrong and the regulators should stop energy companies from doing this. 

mmmmikey

I think this may stem from a misunderstanding about how fixed monthly direct debit accounts work. The idea is to even out the payments over the course of the year without letting customers build up a debt they cannot subsequently afford to pay. So it would be normal to be building up a significant credit balance this time of year so you have plenty of credit ready to pay the higher winter bills. If you take money out the pot the supplier will automatically put the direct debit up to compensate and make sure the money you took out is put back in time for winter.

So nothing sounds wrong, the system sounds like it is working as it should be.

If this doesn't suit you, with most suppliers you can change your direct debit just to pay the full amount off monthly. That way you won't build up a credit balance. But you do need to be aware that your bills are likely to be much higher in the winter which you'll need to budget for.

Rodders53

I'm with EoN and am on the SVT pay by DD on receipt of the bill.  (Was via manual monthly input of meter readings but now automated since they gave me £50 to fit a smart meter).  So now I'm always in debt to EoN rather than them holding my money as a credit.

You'll need to speak to them to get onto that system.  It can't be done via the account portal and there may be cheaper tariffs that are unavailable via that payment method.

Scot_39

Kwiss2 said:

Why is it so hard to get refunds for credit balances promptly? Eon make you wait 10 working days and then put up your monthly DD. This is just wrong and the regulators should stop energy companies from doing this. 

10 working days seems to be a common number.  3  days of it is standard bank processing iirc.

DD goes up because in all likelihood your current DD amount has been reduced to use up that credit.

If take the rough rule of thumb that you should be just in credit at the next DD review - with many firms - annual still for fixed DD payment plan  ( but in reality mines is being recalculated more regularly these days at Ofgem cap changes - more regular and the prices less stable)

New DD = (projected annual cost - credit ) / 12

You start in credit - thevrequired DD set lower
You take away the credit - the required DD goes up.
You start in debit - the required DD goes up

I am in credit at EOn but much less than I was - c£80 vs c£360 after (built up last winter after I set my DD rate based on Oct 22 Ofgem pre epg discount )- which I took half back as a lump sum credit refund - last autumn as not reducing quickly - so yes my DD increased.
And they have been adjusting my DD to remove that remaining credit as prices dropped (apart from Jan 24 cap ) since at some of the 3 monthly Ofgem cap changes since.  I am currently paying just over £6 below my annual projection price notice / 12 to clear that near £80.

However some poster have suggested that they have had higher amounts with an offset added in the 10-20% range to cover possible higher use - e.g. for a colder winter - or that their supplier in one posters case divided by 10 not 12 to create that margin.  Or perhaps to force their account into credit all year round.

If you want the money back call them or request on line via account portal if button option available - mines came and went with their regular recalcs.  So their in Feb, went late Mar after taking c£30 off of DD to clear £360 etc, back by autumn when used it.

If you dont like idea of being in credit - and can afford or have discipline to put aside cash in summer for higher winter heating bills go onto monthly variable direct debit (MVDD)and pay as you go from monthly readings in arrears.

But if you want the lump sum in your account now be sure to ask for it before switching to MVDD as others will simply run credit down until use uses up all credit.

Brie

Do your own calculations to get your annual projection. 

Utility companies have a very odd idea of how to do this - I had one that took the month of January's use as a normal month, multiplied that by 14 to get a full year's use and then divided that by 10 to get the monthly DD.  So by their reckoning sometimes a year has 14 months and sometimes 10 which ever works most to their advantage.  I refused to accept their proposed DD and they accepted mine to avoid me raising a complaint.  

bristolleedsfan

mmmmikey said:

I think this may stem from a misunderstanding about how fixed monthly direct debit accounts work. The idea is to even out the payments over the course of the year without letting customers build up a debt they cannot subsequently afford to pay. So it would be normal to be building up a significant credit balance this time of year so you have plenty of credit ready to pay the higher winter bills. If you take money out the pot the supplier will automatically put the direct debit up to compensate and make sure the money you took out is put back in time for winter.

So nothing sounds wrong, the system sounds like it is working as it should be.

If this doesn't suit you, with most suppliers you can change your direct debit just to pay the full amount off monthly. That way you won't build up a credit balance. But you do need to be aware that your bills are likely to be much higher in the winter which you'll need to budget for.

https://blog.moneysavingexpert.com/2024/05/martin-lewis--stop-the-rip-off---get-p100s-credit-back-p100s-fro/

"Yet right now, May, is the PERFECT TIME to stop the rip-off and get that money back – it's all about understanding the Direct Debit cycle"

BarelySentientAI

mmmmikey said:

So it would be normal to be building up a significant credit balance this time of year so you have plenty of credit ready to pay the higher winter bills.

April/May should be the bottom of the cycle - near zero credit - on the traditional cycle.

Some suppliers do it based on joining date, which is much more confusing to understand.

MatLoweRN

So, if you request a refund for part of your credit balance, they simply increase your DD? Seems a case of giving with one hand and taking away with the other? I've just read this article in which Martin seems to be encouraging those with high credit balances to request a refund. https://blog.moneysavingexpert.com/2024/05/martin-lewis--stop-the-rip-off---get-p100s-credit-back-p100s-fro/ But what's the point if you're just going to end up with higher monthly bills? Im with Octopus and am currently over £900 in credit! I was going to request about £6-700 back. But after reading this I'm not sure it's a good idea?! Am I missing something? 

Scot_39

Yes the £6-700 is in your bank account not theirs, to spend now if required.

Some will keep that in an interest bearing account and make a few pounds in interest on it too.

I used refund to pay towards car service and mot cost.  

Hoenir

Kwiss2 said:

Eon make you wait 10 working days

Internally there'll be a number of steps to be gone through. Not a question of one individual undertaking the entire process. Segregation of duties in large corporate entities is nothing new. Just not normally visible to the naked eye. 

elkiedee

MatLoweRN said:

So, if you request a refund for part of your credit balance, they simply increase your DD? Seems a case of giving with one hand and taking away with the other? I've just read this article in which Martin seems to be encouraging those with high credit balances to request a refund. https://blog.moneysavingexpert.com/2024/05/martin-lewis--stop-the-rip-off---get-p100s-credit-back-p100s-fro/ But what's the point if you're just going to end up with higher monthly bills? Im with Octopus and am currently over £900 in credit! I was going to request about £6-700 back. But after reading this I'm not sure it's a good idea?! Am I missing something? 

If you're over £900 in credit, I would claim it all back, and if you're then concerned about being able to pay bills which go up a little, open a very accessible savings account and put part or all of it there. If you've got outstanding credit card bills or other debts which you can reduce, you could also use that part or all £900+ to overpay but then set aside something in savings each month to go towards the bills when they come through.