Octopus' recommended monthly direct debit amount - take care

Woodbridge

Apologies if this has been covered before, but my understanding is that a fixed amount DD with an energy provider evens out periods of credit in the summer against those winter months when you are likely to move into a temporary debt position. 
I am an Octopus customer and regularly use their online balance projection to see what they think I should pay over the coming months. On every occasion, Octopus recommend increasing my DD to an amount that gives them several hundred £s in credit but never moves my account into a winter debt position.
When I receive an email confirming that Octopus, without my prior approval, is about to increase my DD payments to their recommended value, I go online and adjust the amount down again.
I am not sure if anyone has told Octopus about the fair and equitable financial arrangement of having summer credit and winter debt balances. Am I the only one to highlight this?

TheMilkmansDad

short answer - the forecast works on a non-debt position. As in you account should never be in Debit.

MattMattMattUK

Woodbridge said:

Apologies if this has been covered before, but my understanding is that a fixed amount DD with an energy provider evens out periods of credit in the summer against those winter months when you are likely to move into a temporary debt position. 
I am an Octopus customer and regularly use their online balance projection to see what they think I should pay over the coming months. On every occasion, Octopus recommend increasing my DD to an amount that gives them several hundred £s in credit but never moves my account into a winter debt position.
When I receive an email confirming that Octopus, without my prior approval, is about to increase my DD payments to their recommended value, I go online and adjust the amount down again.
I am not sure if anyone has told Octopus about the fair and equitable financial arrangement of having summer credit and winter debt balances. Am I the only one to highlight this?

Customers should no longer be in debt at any point of the year. If they are on fixed monthly Direct Debit then they should build up credit over the summer months and use that over winder, ideally reaching March at around even. This is stipulated be the regulator, who advise that customers should ideally stay at least one monthly payment in credit at that point in March. Octopus (and all other suppliers) are just following the rules set by Ofgem. 

matt_drummer

Why do you think an energy supplier should lend you money at any time?

QrizB

Woodbridge said:

I am not sure if anyone has told Octopus about the fair and equitable financial arrangement of having summer credit and winter debt balances. Am I the only one to highlight this?

If you read Octopus's T&C you'll find you're required to keep your account in credit at all times. You're not meant to have a debit balance, not even in winter.

Edit:

See para 8.3.1 here:

https://octopus.energy/policies/terms-and-conditions/

[When paying by direct debit] you should keep your account in credit and we will track and carry the balance forward to the next month’s Statement of Account

Tony5896

Interesting, I have the other issue .. my account is always in credit and they are constantly trying to reduce the DD so I am in debit .. 

Lorian

The are other threads about this, not just octopus I think it's industry wide now. 

born_again

Octopus say mine should be £203.41 Been going up each month.
I have a £500 credit after DD is taken, been rising since April. They have no issue with me paying £100 on the DD which is covering my current usage, & adding a small amount to the credit.
I will increase DD when usage exceeds DD at some point.

Octopus have no problem with lower DD, than their suggested one. Just figure it out yourself what to pay a month. Just keep enough credit to pay worst bill in winter, as well as a credit on the April bill.

ballisticbrian

I've noticed this autumn that what happened was I went through a week of unusually high usage (electric on smart meter) and it triggered an email suggesting my DD go up

Alnat1

As always mentioned in these threads, if you are ok at budgeting, ask to change to Variable DD and they will take the full amount of each month's bill leaving you're energy account at 0. If the account is currently in credit you pay nothing until it's all used up.

This only works if you can afford the bigger monthly bills in winter, or are happy to put some aside in a savings account over summer to help top up winter payments.

WiserMiser

matt_drummer said:

Why do you think an energy supplier should lend you money at any time?

That's the way that the system always used to work.  It was swings and roundabouts, sometimes they owed you, sometimes you owed them.  Overall, the energy supplier broke even.

Then Ofgem changed the rules...