At what point in the year would you expect to use more than your DD?

EssexHebridean

This conversation has been had before. MVDD is brilliant for those who it suits, but for those it doesn't, it's either downright dangerous, or a PITA. For me, it would mean me having yet another savings pot, plus another bit of money shuffling to do each month, and all for a pretty tiny bit of interest, to be honest. It suits me far better right now to just let the credit build, extract a bit of it when it gets higher than needed and use that to bolster the pot for logs and smokeless, and maintain a lower DD year round which also frees up a balance to pay in to the log/fuel pot. (Indeed, I've just ordered some logs and coal using those very funds!) 

pseudodox

"MVDD is brilliant for those who it suits, but for those it doesn't, it's either downright dangerous, or a PITA."

Exactly!  We should ALL have the choice with every supplier to pay in a way that suits us and not be herded into a one-size fits all system.

Scot_39

Providing your willing to pay the true costs of your choices - and a supplier wants to offer it - fine.

Some choose standard credit and pay the £112 for paying after the event.  Some on monthly credit bilking at likesof EDF will get effectively no more credit than those on mvdd.  Bill posted in a week 2 weeks deadline etc.

I hope Ofgem might argue their costs will now be closer - to reflect the reduced negative cashflow and credit risk.  But then Ovo just adding £18 for paper billing - so wouldn't guarantee it.

If you want to save and not carry a large credit balance - prepay - currently iirc £48 cheaper than DD  (sorry cannot remember Jan 1st diffference) could now be a better way to save.

Probably far more than the average person would gain or lose on interest.

At 5% you'd have to be owed £960 to lose £48 in interest - we'll over £1000 now rates dropping.

Last Ofgem quarterly figure I saw on CCB was iirc  c£220 and dropping - on £220 average - at 5% - under £11 pa - under £1 per month.  A fraction of prepay's current  savings.

QrizB

I haven't had a monthly bill larger than my DD for the past 2 or 3 years. Instead I request a credit refund every quarter.

Before anyone jumps on me for letting my supplier enjoy the use of my money, I have a current account that pays 1% cashback on utility bills so I'm effectively earning ~4% pa on my credit balance.

Gerry1

pseudodox said:

"MVDD is brilliant for those who it suits, but for those it doesn't, it's either downright dangerous, or a PITA."
Exactly!  We should ALL have the choice with every supplier to pay in a way that suits us and not be herded into a one-size fits all system.

If only the so-called regulators actually regulated and put the consumer first...

Sadly they've all succumbed to Regulatory Capture, the latest being the FCA.

The recent MPs' report concluded that the FCA was "incompetent at best, dishonest at worst", that its actions were "slow and inadequate" and that its leaders were "opaque and unaccountable".

Ildhund

I don't know if this helps, but when calculating my DD, OVO use a set of weightings to predict each month's cost (electricity only in my case). These weightings haven't changed in many years, and I've no idea where they come from, but for what it's worth, here they are:
  

Multiply the annual consumption by a month's weight to find the projected usage for that month.
The mean value shows the level for calculating the normal DD, 1/12 of the projected annual cost. Months in the summer semester show below average usage, in the winter above average.

chubsta

Gerry1 said:

chubsta said:

Like many people I have built up a decent credit ready for the Winter

Very generous of you to donate the interest to your supplier !  Why not switch to Monthly Variable Direct Debit and keep it for yourself?

Because it suits me this way - I pay exactly the same amount each month, which I can afford, and as I have a large credit built up if I need to I can put the heating on and be warm. Unfortunately, If I was monthly DD I would be very reluctant to warm myself up as the idea of a huge bill coming in at the end of the month would dissuade me and I would sit there shivering - I suppose it is the difference between spending money (MVDD) and getting value out of money I have already spent. Hard to explain but once money has gone from my account and is spent I never worry about it, I just hate upcoming expenses.

I know this site is about saving every penny but lets say I had £800 credit in my energy account - at a Savings rate of 3.5% I would get £2.33 interest per month - in my opinion, as tight as I am, that sort of saving is not worth worrying about. Of course, multiply that by a few million and the energy companies do well but to me it is nothing.

Thanks for the comments on usage, looking at my own records I used much less last November but of course it wasn't as cold then and I am also trying to keep the house temperature higher as I think having it low last year caused problems with damp etc.

I have used £600 of gas/electric since April and have £790 in credit - it may seem a lot but the house is detached and takes a fair bit of warming up so am expecting to use a fair bit of gas over the next few months.

Ildhund

I updated my pretty chart to show where a constant Direct Debit should lie, thus getting a bit closer to answering the original question. 

bob2302

Ildhund said:

I updated my pretty chart to show where a constant Direct Debit should lie, thus getting a bit closer to answering the original question. 

Those figures aren't representative because they are just electricity. I spend more on electricity in winter, more hot meals and more use of the CH pump etc, but it's  nowhere near the variation that comes from typical level of heating.

There is no generic answer to this, one has to look at one's own historic data in detail.

Scot_39

Ildhund said:

I don't know if this helps, but when calculating my DD, OVO use a set of weightings to predict each month's cost (electricity only in my case). These weightings haven't changed in many years, and I've no idea where they come from, but for what it's worth, here they are:
  

Multiply the annual consumption by a month's weight to find the projected usage for that month.
The mean value shows the level for calculating the normal DD, 1/12 of the projected annual cost. Months in the summer semester show below average usage, in the winter above average.

Ive come across that sort of chart before.

And wondered about the mix of occupancy, house size and heating.

It's only allowing just over 60% increase for winter months - mines can be easily over 200% (winter 3x or near 4 in colder winters) with conventional electric.