Will making a payment to Outfox Energy stop DD changing?

WiserMiser

It used to be swings and roundabouts, sometimes you were in credit, sometimes you were in debit.  The average balance was zero, so it was fair to everyone.  It simply smoothed out the payments.

However, most suppliers now insist that if you have these misleadingly named DDs they must remain credit at all times, and not by a trivial amount.

It's just a sneaky way of getting an interest-free loan at the customers' expense.

It also means that if a supplier goes bust the rest of us will have to pay extra to refund the credit balances to all their customers.  Another good reason to make Variable DD the default option.

Scot_39

Octopus have varied their descriptions - but essentially ideally want 0 balance at the end of April - or about 5 weeks balance at the beginning of April - so that the balance - argaubly before the April payment - is at or around zero.

Not that users will necessarily see that exact low point on any actual statement - as their tool is a pseudo live rather than statement date snapshot.

https://octopus.energy/blog/direct-debit-payments/

Compare the ML clip balance at the beginning of this with the amber and green lines at the beginning of the Octopus section - and you will see a stark difference - ps the £131 payment at the start - amber line ? -  is about what the tool recommends 

https://www.youtube.com/watch?v=GXWlgsAcwNU

Ovo 1 month Mar for existing -  zero balance for new starters - but then guess they fall onto the 1 mon Mar target 

https://forum.ovoenergy.com/understanding-bills-payments-172/how-does-ovo-energy-calculate-my-direct-debit-10410

And the Octopus graph amber / green - maybe averages c£350/£200 and costs say £10-12 in interest max if put in the ave of the best instant access savings account - and thats falling all the time - that's about 1 months saving on annualised DD vs standard credit pay on demand CAP - which as of midnight is now £1894 vs annualised DD £1758 - £136 pa / £11.33 pm more.

I suspect though users with Octopus will not face any forced DD corrections if want to set lower - but top up to avoid debits. That seems to work for many - who clear bills monthly on receipt of e-statements / e-mail notice - on other DD plans like MVDD.  Other suppliers seem far more rigid on annualised plans.

And new starters often face deposits before granted annualised plan credit - some security deposits appear to be held off account balance - and in perpetuity - according to one post recently (was it from a SO Energy user ?)

Fatferds12

Just to let you know that Outfox have confirmed that by making a payment into my accout to keep it in credit my direct debit won't be amended.  
Many thanks to everyone for your comments and advice.  

born_again

Brie said:

Supposedly it's normal for you to be going in to debt this time of year and then return to credit when less energy is used in the summer.  If they say they are going to raise your DD that's the time to do your own calculations and TELL them what the DD needs to be.  If it looks likely to rise due to rising costs then that's when you can make a payment and do your calcs again.

Can't find a link, but from previous posts on this subject now, that regulator & companies are expecting you to be in credit (one month?) in April.

MWT

born_again said:

Brie said:

Supposedly it's normal for you to be going in to debt this time of year and then return to credit when less energy is used in the summer.  If they say they are going to raise your DD that's the time to do your own calculations and TELL them what the DD needs to be.  If it looks likely to rise due to rising costs then that's when you can make a payment and do your calcs again.

Can't find a link, but from previous posts on this subject now, that regulator & companies are expecting you to be in credit (one month?) in April.

The liquidity requirements than Ofgem have placed on suppliers have pretty much ended any tolerance for allowing customers to go negative over winter, and some like Octopus have had the requirement to remain in credit as part of their T&Cs for years.

WiserMiser said:

It's just a sneaky way of getting an interest-free loan at the customers' expense.

The energy suppliers are paying to hedging their future energy needs months in advance, so it is not just cash sitting in the bank earning interest.

This is also why we are seeing fewer suppliers willing to offer payment on receipt of bill, or variable DD options.