Fixing now

Booker_j

Hi all

always been on pay on receipt of bill. Looking now to fix for a year. My question - as I haven’t built up credit over the summer months, if I fix now will the advertised monthly direct debit go up in a few months. I know it SHOULDN’T as it’s designed for the company to recoup the debt over the summer months, but knowing what these firms  are like… will they? As then I’ll end up in a big credit come the summer months and don’t like the idea of these firms earning interest on my money. 
thanks
 

matt_drummer

You want them to lend you money over the winter and you'll pay it back next summer?

You want them to lend you money so you can earn interest on it?

BarelySentientAI

You've got it backwards.

Fixing direct debit is designed for you to build up a credit in the summer so you don't go into debt in winter.  And is nothing to do with fixing tariff.

If you haven't built up credit in the summer and you were on direct debit, then the direct debit was too small.
If you haven't built up credit in the summer because you pay on receipt of bill, then of course you wouldn't have credit because you never should in that circumstance.

If having a credit balance gives you that much stress, then move to a supplier who will do variable direct debit, regardless of if you take a fixed or variable tariff.

Booker_j

It’s more about fixing the tariff, they’re offering a product and allowing me to fix at the end of summer. If I was to pay what they’ve quoted then come the end of the fix they will have the money. If they up my winter direct debit, when usage reduces next spring / summer they’re not going to be reducing DD are they..?

It says the direct debit is calculated to cover the cost over 12 months, not a monthly basis. 

BarelySentientAI

Booker_j said:

It’s more about fixing the tariff, they’re offering a product and allowing me to fix at the end of summer. If I was to pay what they’ve quoted then come the end of the fix they will have the money. If they up my winter direct debit, when usage reduces next spring / summer they’re not going to be reducing DD are they..?

It says the direct debit is calculated to cover the cost over 12 months, not a monthly basis. 

If they do a direct debit review, then yes.  Otherwise you will have credit that they can refund.

OFGEM don't like customers being in debt in winter, regardless of when your contract starts.

Booker_j

matt_drummer said:

You want them to lend you money over the winter and you'll pay it back next summer?

You want them to lend you money so you can earn interest on it?

They know what my winter usage and usage over last 12 months is from smart meter, so why are they quoting me this monthly figure that will be lower than what is used in winter, knowing I haven’t built up credit?

matt_drummer

Booker_j said:

matt_drummer said:

You want them to lend you money over the winter and you'll pay it back next summer?

You want them to lend you money so you can earn interest on it?

They know what my winter usage and usage over last 12 months is from smart meter, so why are they quoting me this monthly figure that will be lower than what is used in winter, knowing I haven’t built up credit?

I don't know.

My guess is, they're stupid.

But you expressed concern about building up credit and your supplier earning interest on your money whilst appearing to expect your supplier to lend you money over the winter that you would pay back by the end of next summer.

Unless it's a real problem, pay what they ask, keep your eye on the balance and ask for a refund if it gets out of hand.

Then spend the rest of your time doing something more productive than worrying about an energy supplier having a bit of your money in advance.

Booker_j

I’m just concerned that they will increase it by silly amounts over the initial winter months (more than what I’m actually using) - is it possible to make additional payments (one off) to cover the debt? Excuse my ignorance, never done anything other than pay on receipt, but obviously fixing will secure lower price hence my interest. 

matt_drummer

I don't see why any supplier would charge significantly more than you are actually using during the winter.

If you pay that then you'll start to build credit as your usage reduces.

Monitor it and talk to them if necessary, they are only human and can be reasoned with.

Just monitor it.

Take control if necessary either way, pay in a bit more if you need to or ask for a reduction.

It sounds like you know what you'll use more or less.

You'll get cheaper rates by being on direct debit than paying on receipt of a bill.

Depending on the supplier, you could just pay a monthly bill by direct debit, some do it, some don't.

If you do that, the winter bills are likely to be higher than the summer but it sounds like you are used to that.

MP1995

Booker_j said:

Hi all

always been on pay on receipt of bill. Looking now to fix for a year. My question - as I haven’t built up credit over the summer months, if I fix now will the advertised monthly direct debit go up in a few months. I know it SHOULDN’T as it’s designed for the company to recoup the debt over the summer months, but knowing what these firms  are like… will they? As then I’ll end up in a big credit come the summer months and don’t like the idea of these firms earning interest on my money. 
thanks
 

I can answer this with my experience with octopus many years ago.

We joined them in Septemebr as a new customer with no credit, signed up to monthly direct debit which was set at £100 if I remember correctly and we did indeed by the end of what we call the winter months (October to March) have a decent debit of the account aome £250+.

Octopus did not review our direct debit and by the following September we were in credit.

I guess it depends on your supplier.

Gerry1

Stop paying on receipt of bill, it costs more.  Switch to Direct Debit to get the best rates.

Make it Monthly Variable DD (Whole Bill Payment) to avoid building up credit.  Makes bills easier to understand as well.

AFAIK most suppliers offer MVDD (except Ovo) but you may have to call them, it may not be shown online.

Just make sure to send monthly readings if you don't have working smart meters.