How much does Octopus earn from interest on utilities credit balances?

pete-20-11

They might even have to pay their bank for the privilege of having a business bank account 🤣

BlueonBlue

If inclined you could reduce your monthly DD (by as much as you can get away with).... then pay the monthly debit balance with a 1% cashback credit card .

This actually happened to myself recently I think it was because my varible tariff prices increased after after my fix ended.

 After a number of months I owed either side of a £100 which I then payed by credit card this happened twice this year up to end of sept .
I increased the DD when I got a new tariff end of sept so now the account should be running in credit .

When asking for a credit balance refund over the years I found they will do it but sometimes seem reluctant and try and talk you out of it .

Scot_39

gaiteiro said:

Does anybody know how much Octopus earns from all our money that they're holding in the bank?

Octopus charges me a fixed sum in monthly direct debit based on my average utilities bills. They tell me this is to help me balance my bills over the year, but it's actually an interest-free loan from me to them.

Imagine if I asked to "balance my bills" by paying 6 months later, instead of 6 months in advance...

The utilities firms must be making a fortune this way... someone should investigate.

If worried move to variable direct debit if you can budget for seasonal variation.

If you paid in arrears on standard credit - which is typically 3m these days but some are moving to monthly - you ould pay c7% more - higher sc and higher unit rates.

Thr curent duel fuel cap for standard credit is £112 more per year.

Or even better prepay currently £48 cheaper still

Part of the SC premium admin, part is credit risk ,part cash flow ( if you like interest on them borrowing to pay for your energy before you pay them).

The average customer credit balance iirc is not far over £200  in one of Ofgems more recent summaries for CCB even at 5% rates - your not talking huge sums.

And Ofgem has investigated, has proposed tightened rules on suplliers using all of the credit balance as business financing- (iirc 20% at least to be held by default at financially healthiest suppliers as cash for refunds etc) but has refused to ring fence 100% of credit balances.

DullGreyGuy

Ildhund said:

Energy suppliers held about £3.7Bn of DD customer credit balances at the end of June. At the same time, the sum total of customer debt and arrears (owing for more than three months) was ... about £3.7Bn. That doesn't look to me like a money-making situation for the suppliers.

And end of June you'd expect more accounts to be in credit than say end of Feb as the idea of the fixed DD scheme is you build credit in summer to burn in winter and hence get flat payments through the year rather than peaks and troughs.