Are British Gas overcharging? advice needed

oldflame

I did an energy price comparison on the MSE Energy Club for my mum's gas and electrictity (she's 88 and can't do it herself). She is currently with British Gas on a fixed rate tariff ending in July 2026 and paying £223 a month. 

I worked out her annual usage and did a new price comparison. The results show that she can save some money by switching with several choices which is good (although she will have to pay 50 pounds early exit fee for both elec and gas) but to my surprise the results showed that according to the calculation she is currently paying just over £100 per month.

This suggests that she is paying more than double what she needs to be. Is BG ripping her off or is there a mistake in MSE's calculations?  Or have I made an error? I double-checked the readings and did the compaison again but it still showed the same results.
I then contacted BG as she was more than 3 months in credit and suggested that she was being overcharged. They said they would send a refund cheque for £350 and reduce her montlhy charge which is good but they have only just lowered the direct debit amount.

What should I do? Should I stay with BG and see what happens or switch to save money but have to pay the early exit fee? 

This is my first forum post, although I have been doing switching for a while but usually without problems.

Isthisforreal99

To compare like for like you need to look at the actual unit costs and standing charges on each tarriff, not the direct debit. It's always a good idea to be in credit at this time of year although not all share that view.

molerat

You are confusing what you pay each month with the pcost of energy, the monthly payment is purely a contribution into the kitty.

What is the unit price and daily charge for the different tariffs ?  That is the only thing that matters.

EssexHebridean

They're not ripping her off, because if a credit is building up she will be able to request it back if it's above the level that is required. 

As you say she's not able to manage things herself, presumably it is you who currently checks her bills etc - do the readings on the bills match the readings that either you or her smart meter are submitting?

singhini

I get why you’re concerned, but it doesn’t look like British Gas is ripping your mum off. The MSE figure is just her average monthly cost based on usage — it doesn’t account for higher winter bills. BG sets the direct debit to spread those costs across the whole year, which is why she built up credit over summer.

The £350 refund is fine, but with winter coming she could easily end up owing money if the new direct debit is too low. Switching now probably isn’t worth it once you factor in the £100 exit fees.

As mentioned by others, to compare like for like you need to look at the actual unit costs and standing charges on each tariff. 

Brie

Take a year's use of both gas and electric and calculate what that will cost at today's tariff.  Get a monthly figure.  If that is significantly lower than what she is paying by DD then BG should be told it needs to be lowered.  Don't put up with any "we keep the DD high to protect your account" malarky.  A small credit is fine this time of year but not more than a couple of month's worth in my opinion.  The alternative is to get them to switch her to a variable DD so that she pays exactly for the power she has used in the previous month.

FrugaiMacDugal

Are BG getting actual meter readings or working on estimates?

Best to tale your own readings and compare.

WiserMiser

Brie said:

The alternative is to get them to switch her to a variable DD so that she pays exactly for the power she has used in the previous month.

Good idea, but apparently BG don't offer this unless you were originally on their old billing system.

oldflame

Thanks for your help. That's a lot to take on board. I will look again at the figures and work out the unit costs and standing charges and compare before I do anything. I don't want to switch unless its really worth it because of the exit fees.

Also with my acount (I live at a different address) I am currently with Octopus on their Loyal 14 month contract. I have done a comparison and there are some cheaper deals but on the last TV show Martin Lewis said that there was a good fixed 12 month Octopus tariff but this did not show up in the results and I cannot see how to change tariff on my on line accout. Is it worth me switching or should I stay?

WiserMiser

oldflame said:

Also with my acount (I live at a different address) I am currently with Octopus on their Loyal 14 month contract. I have done a comparison and there are some cheaper deals but on the last TV show Martin Lewis said that there was a good fixed 12 month Octopus tariff but this did not show up in the results and I cannot see how to change tariff on my on line accout. Is it worth me switching or should I stay?

From the Octopus website:-

What if I can't see the option to move tariff?

You'll be able to see this option if you're on a variable tariff (like Flexible Octopus), or if you're on another fixed tariff and within 45 days of the end of your contract.

If you have any questions or can't see the option, contact us for help moving to a fixed tariff.

oldflame

I must have missed that, thank you.