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

Scot_39

WiserMiser said:

EssexHebridean said:

If that bill the totals more money than you had allowed for it though, it turns into a problem.

True, but you'll soon be aware of the problem and can take action, e.g. by increasing your standing order, turning the wick down a bit and wearing a woolly.

EssexHebridean said:
It’s great that MVDD suits you, but you need to accept that it doesn’t suit everyone.

Of course I accept that it doesn't suit everyone !  I've never said it does.

What I have always said is that dozy Ofgem should insist that all suppliers should offer MVDD alongside Equalised DDs. (Not 'Fixed' DDs because they're likely to change every three months, bobbing up and down with the Price Cap.  Also avoids confusion that it'll be the Billed amount that's fixed, the All You Can Eat problem that never goes away.)

That way we'd have a level playing field and everyone would be happy.

Its not a level playing field though.

Not from the companies perspective - why do you think Ovo stopped offering it (and is one of those failing Ofgem resilience tests) - so maybe not a shining example of financial management) - and others have never offered it.

If more folk understood the building blocks for standard credit being more expensive than annualised DD plans in the cap in the first place.  

Or understood management and costs of cash flow and credit risk in companies - the impact on operating costs and so ultimately in the the end prices charged - they would see beyond their often tiny short term "win" against the big bad suppliers from MVDD.  Which only risks driving operating costs and so prices upwards.

And those who should perhaps feel most aggrieved are arguably those who have been moved to monthly standard credit - who still pay the premium for paying in the same timescales - 1 month in arrears - in the overall £136 cap difference) to those on MVDD - but they are not being charged for it.

And as more on annualised plans are moved to always in credit  - Ovo and Octopus with the one month / five week minimums - cover reportedly c12m homes - about 40% of UK total - there is an argument that the annualised DD price could drop further (or rather not rise as quickly due to govt policy increases, net zero policy and of course others debts).

MVDD customers who do not contribute to that improved cash flow and so operational cost saving - should not benefit.

There is a post above speculating that energy companies are still flush/profitable - despite the clear indications - like the combined £4.4bn in arrears / debt - adding on average £50 in this Aprils cap - the fact that Ovo and Octopus (has the one other - iirc there were meant to be 3 - already failed - or just never been announced publicly) are failing Ofgems financial resilience tests - surely suggests otherwise.

And if either of them were to fail - well Ovo at c4m alone would see similar to the number that went through SoLR at the c28 failures in 2028 /2029 (inc bulbs 1.6m) - which cost the average user over £100 - on electric SC and gas rates.  And Octopus would see nearer double impacted.  Not saying either likely - but...

Last Ofgem CCB figure I remember - was around £230 in last years data - and even if that was all year - that would be worth about £10 max in the lore of "lost interest" - but the reality is likely to be more like half that - - sub £5 per year.

Not a bad cost to insure against the cost of SoLR repeating - or to pay to benefit from the soon to be £136 saving between standard credit and annualised DD cap costs in Jan 26 caps. (Of course that £136 is for more than just the credit / cash flow / credit risk)

And those who do not want annualised DD - have of course the third (and original - c2 years before DD and credit iirc) Ofgem capped tariff to switch to - prepay - and with smart meters is far easier to manage (than traipsing down to corner shop with meter key in hand)

Qyburn

In the discussion about how difficult it would be for some to cope without a fixed monthly DD, don't forget that a lot of households don't even have the option. If you use oil for example you're typically going to be paying in advance for 6 or 12 months supply.