This Morning chat, energy supplier wanting to hold 3 months credit!

pseudodox

WiserMiser said:

born_again said:

WiserMiser said:

If Ofgem were any good they'd make all suppliers offer it as an option.  Those who can't budget for themselves would still be able to have equalised DDs.

That's a very sweeping statement. I can more than budget, but prefer the known of a regular payment going out. Which is a very good form of budgeting for many.

Yes, but it's a sweeping statement that's fully justified !  An even better form of budgeting is to opt for MVDD and set up a Standing Order to pay that amount every month into an instant access savings account ring fenced for that purpose.  You won't have to beg your supplier to change the amount, you won't have to wait eight weeks to get the closing balance refunded, plus you'll get a bit of interest, probably up to about 4% if you shop around. 😎

Especially if you put a generous estimate of your usage away each month.  That will then either build up to cover extra use in a severe cold spell or you will accumulate some surplus which you can spend on a treat in the summer.  No waiting to get a refund, no time wasted chasing it up.

I really don't get why it is regarded as ethical for energy companies to sit on £billions of customers money & yet not ethical for customers to pay in full, albeit in monthly arrears,  for EXACTLY what they have used.  And never need to ask for a refund or adjusted payments.  Once EDF receive my DD they get to keep every last penny.  If we are expected to hand over our potential savings they should pay out interest on the balances they hold.  Maybe I only earn pennies by putting money aside in MY savings pot, but at least those pennies are MINE.

MSE contributors are a very small representation of the population paying energy bills but it does strike me that the majority here having continuous hassle & dispute over what they are expected to pay & those who get into debt through thinking FDD is all you can eat far outnumber anyone having problems with MVDD.

wrf12345

I am surprised that Octopus (and others) are so slow to take the variable DD each month, more than two weeks from when they generate the bill in my case, would not mind if they tightened that up a bit - would be much better than going back to fixed DD and having a three monthly argument about it being increased for no reason - which is the real problem with the current system. If energy retailers were treated the same way by energy producers you would hear a lot of hysterical screaming from their accountants.

Scot_39

WiserMiser said:

... An even better form of budgeting is to opt for MVDD and set up a Standing Order to pay that amount every month into an instant access savings account ring fenced for that purpose.  You won't have to beg your supplier to change the amount, you won't have to wait eight weeks to get the closing balance refunded, plus you'll get a bit of interest, probably up to about 4% if you shop around. 😎

Although your suggestion re second ring fenced account will work - arguably now is not the best time to start it - especially if finances are tight.

As means likely to have to find the extra for large winter bills right now - and so arguably better for those with tight finances to start in spring - to build up the cushion for next winter.

The Op for instance if swapped now  - could have to make 1 if not 2 more payments - at winter higher bill levels - to any new supplier - before could be confident of receiving the refund from Ovo after any switch to a firm offering MVDD.

In reality that account would likely need initial funding to around 2x annualised DD to last many to spring - less if frugal - more if all electric I'd say (especially with Jan 5% increase coming)

A £50 referral code could help a little - but probably not cover the majority of many peoples winter vs average bills for even a month

As to interest - I often suspect most people over estimate the assumed worth in interest return - or conversely loss of interest on funds - if firms are holding some credit.

Iirc last years average Ofgem customer credit balance in Q3 was down to c£230 - 4% interest on half that on average - £5 tops.

Scot_39

pseudodox said:

WiserMiser said:

born_again said:

WiserMiser said:

If Ofgem were any good they'd make all suppliers offer it as an option.  Those who can't budget for themselves would still be able to have equalised DDs.

That's a very sweeping statement. I can more than budget, but prefer the known of a regular payment going out. Which is a very good form of budgeting for many.

Yes, but it's a sweeping statement that's fully justified !  An even better form of budgeting is to opt for MVDD and set up a Standing Order to pay that amount every month into an instant access savings account ring fenced for that purpose.  You won't have to beg your supplier to change the amount, you won't have to wait eight weeks to get the closing balance refunded, plus you'll get a bit of interest, probably up to about 4% if you shop around. 😎

Especially if you put a generous estimate of your usage away each month.  That will then either build up to cover extra use in a severe cold spell or you will accumulate some surplus which you can spend on a treat in the summer.  No waiting to get a refund, no time wasted chasing it up.

I really don't get why it is regarded as ethical for energy companies to sit on £billions of customers money & yet not ethical for customers to pay in full, albeit in monthly arrears,  for EXACTLY what they have used.  And never need to ask for a refund or adjusted payments.  Once EDF receive my DD they get to keep every last penny.  If we are expected to hand over our potential savings they should pay out interest on the balances they hold.  Maybe I only earn pennies by putting money aside in MY savings pot, but at least those pennies are MINE.

MSE contributors are a very small representation of the population paying energy bills but it does strike me that the majority here having continuous hassle & dispute over what they are expected to pay & those who get into debt through thinking FDD is all you can eat far outnumber anyone having problems with MVDD.

Of course those who have no such hassles - are highly unlikely to post.

Or those who understand the reasons for credit balance, those who understand that cash flow and credit risk management are essential  and significant to running a successful company, are unlikely to complain when companies protect themselves at minimal cost to clients.

I hold more in my current account at minimal return than an energy supplier ever will on my accounts. And I suspect the same true for many who worry about credit balances and advocate mvdd as the solution.

Cash flow costs and credit risk associated with paying in arrears part of reason standard credit payment - now monthly for many at 2 of the big 6 - including EDF - pay over £10pm more at cap level.

Ovo apparently tell customers they will always hold onto 1 month balance in all circumstances even if plead on phone - in case the next DD payment "fails" - but default to 3m at this time of year - according to one of their customers recent postings.

And in the extreme, part of what brought tomato to its knees was cash flow - due to an inability to bill certain customers in a timely fashion, others not at all.

And even though my supplier offers mvdd - and i am as some put it "capable of budgetting" - I have no intention of swapping to it.

As I would rather "lose" at most a couple of £s in interest on a small credit balance for part of the year than risk paying another £100 plus in SoLR costs - or pay the extra cost of paying in arrears those on standard credit must pay.

pseudodox

And in the extreme, part of what brought tomato to its knees was cash flow - due to an inability to bill certain customers in a timely fashion, others not at all.

If a company cannot run it's business & finances in a proper manner then why should we pay to support their inefficiency.  Do you imagine energy companies pay their staff salaries & general operational expenses in advance?
I was always paid in arrears after working a week/month.

@wrf12345 I also would be happy to pay sooner after arrival of bills, but this delay is governed by the DD banking guarantee.  Perversely if someone pays on receipt of bill there is a surcharge.  It costs the company more to process such one-offs than to accept regular DDs as payment.  My MVDD is no more likely to fail than a FDD & possibly less likely as I never need to interfere/dispute it.

Scot_39

And chances are - depending upon tge business - many employers would be paid in arrears for your efforts.

In some manufacturing and engineering projects roles potentially months later. 

luci

Scot_39 said:

pseudodox said:

WiserMiser said:

born_again said:

WiserMiser said:

If Ofgem were any good they'd make all suppliers offer it as an option.  Those who can't budget for themselves would still be able to have equalised DDs.

That's a very sweeping statement. I can more than budget, but prefer the known of a regular payment going out. Which is a very good form of budgeting for many.

Yes, but it's a sweeping statement that's fully justified !  An even better form of budgeting is to opt for MVDD and set up a Standing Order to pay that amount every month into an instant access savings account ring fenced for that purpose.  You won't have to beg your supplier to change the amount, you won't have to wait eight weeks to get the closing balance refunded, plus you'll get a bit of interest, probably up to about 4% if you shop around. 😎

Especially if you put a generous estimate of your usage away each month.  That will then either build up to cover extra use in a severe cold spell or you will accumulate some surplus which you can spend on a treat in the summer.  No waiting to get a refund, no time wasted chasing it up.

I really don't get why it is regarded as ethical for energy companies to sit on £billions of customers money & yet not ethical for customers to pay in full, albeit in monthly arrears,  for EXACTLY what they have used.  And never need to ask for a refund or adjusted payments.  Once EDF receive my DD they get to keep every last penny.  If we are expected to hand over our potential savings they should pay out interest on the balances they hold.  Maybe I only earn pennies by putting money aside in MY savings pot, but at least those pennies are MINE.

MSE contributors are a very small representation of the population paying energy bills but it does strike me that the majority here having continuous hassle & dispute over what they are expected to pay & those who get into debt through thinking FDD is all you can eat far outnumber anyone having problems with MVDD.

Of course those who have no such hassles - are highly unlikely to post.

Or those who understand the reasons for credit balance, those who understand that cash flow and credit risk management are essential  and significant to running a successful company, are unlikely to complain when companies protect themselves at minimal cost to clients.

I hold more in my current account at minimal return than an energy supplier ever will on my accounts. And I suspect the same true for many who worry about credit balances and advocate mvdd as the solution.

Cash flow costs and credit risk associated with paying in arrears part of reason standard credit payment - now monthly for many at 2 of the big 6 - including EDF - pay over £10pm more at cap level.

Ovo apparently tell customers they will always hold onto 1 month balance in all circumstances even if plead on phone - in case the next DD payment "fails" - but default to 3m at this time of year - according to one of their customers recent postings.

And in the extreme, part of what brought tomato to its knees was cash flow - due to an inability to bill certain customers in a timely fashion, others not at all.

And even though my supplier offers mvdd - and i am as some put it "capable of budgetting" - I have no intention of swapping to it.

As I would rather "lose" at most a couple of £s in interest on a small credit balance for part of the year than risk paying another £100 plus in SoLR costs - or pay the extra cost of paying in arrears those on standard credit must pay.

I agree with every word.

I'm posting just to balance out the anomaly that everyone has issues with building up a credit balance, DDs and energy companies retaining credit.

I fully understand how a fixed rate and a "budget" DD works. When I was with So Energy, if you asked for a refund of credit, they retained one month's DD between April and Septermber and 2 month's between October and March.

I aways like to start a new contract year with as close to a zero balance as possible, so I ask for my refund when I start a new fixed rate if I'm staying with the same provider.

Scot_39

wrf12345 said:

I am surprised that Octopus (and others) are so slow to take the variable DD each month, more than two weeks from when they generate the bill in my case, would not mind if they tightened that up a bit - would be much better than going back to fixed DD and having a three monthly argument about it being increased for no reason - which is the real problem with the current system. If energy retailers were treated the same way by energy producers you would hear a lot of hysterical screaming from their accountants.

Because the dd amount is variable, the "amendment" delay protection built into the DD scheme - as the customer has to be notified of the amount in advance.  And that is a minimum of 10 working days - so 2 weeks assuming no bank holidays etc - and thats from your receipt of notice. It then takes 3 working days to clear into suppliers account.  So in reality 17 days min, more if bank hols weekends etc etc.

And so the DD delay is similar to the payment demand windows these days on standard credit bills.

And by the time thry have your mvdd money for tge previous month - they have supplied another 2.5- 3 weeks energy - so in reality your always 1 month behind use on average.  At cap level - c£150

Assuming as others have described the Octopus implementation - the balance sits at zero until billed, increased by the bill and the pending DD clears back to zero.

Of course that could be amended to hold say 1m balance rather than zero, as proposed by another forumite to address cash flow issue forsuppliers in order to retain dd rates.

But would likely not be popular. Leaving only cheaper smart prepay as a way to hold lower balances.

pseudodox

Energy companies cannot be that hard up, well certainly not EDF, as so far this year I have been given £300 credit for agreeing to have smart meters, £100 goodwill credit because they screwed up my online account post installation and now I am getting £100 to refer friends and the friends get £75.  Admittedly I am now running short of friends to recommend for this mutual benefit but up to date it has all been a nice little earner, bringing my energy costs for this year down to a level not seen for years!  And with the reinstated £200 WFA I have paid out less than half from actual income against what I have been billed.  You have to play the game.

Scot_39

I wonder how big a fine Ofgem are threatening them with for meter install targets if now at £150.