Octopus Energy Variable Direct Debit

QrizB

We've had several (thelree or four, that I recall) forumites recently say that Octopus have produced an unexpected mid-cycle bill. This sounds like another of those.

With a fixed monthly DD, it makes no financial difference. With a variable DD, it changes the timing of payments.

Scot_39

I wonder if a smart missing one or two nightly updates might be enough - so the billing system retrying the initial request gets treated as a new out of sequence read in some way.

webstergm

So to clarify, I had my solar panels and batteries installed in Aug 2023, smart meter installed Feb 2024 and have received a monthly invoice on the 26th of the month since generated by the smart meter. The payment from my bank is taken 14 days later around the 9th of the following month. There has been rate changed during this period but it has never affected bill 26th payment 9th. It is only recently that Octopus have tried to take interim payments by stating a variable DD allows them to take payments whenever the smart meter generates a bill. They have not been able ti explain why, after nearly two years, my smart meter has started doing this. The new DD setup 2 January 2026 clearly states the payment date is the 6th so if Octopus try to claim additional payments in the same month on different days I will challenge it.

Bendo

In the grand scheme of things, what does it matter? You are still paying the same amount.  The time spent posting here about it, contacting them to complain, is probably a lot more involved than having looked at it and gone "thats odd, oh well".

squirrelpie

AIUI meters, including smart meters, do not generate bills. They just report consumption and related data as instructed. (See https://www.smartdcc.co.uk/our-smart-network/how-do-smart-meters-send-readings/ ) It is suppliers that generate bills or statements using the information sent from the smart meter. And it is the supplier's systems and ultimately their employees who are responsible for ordering those bills to be produced.

So it seems very reasonable to me to contact the supplier and ask for an explanation of why they are sending bills at any other time than that agreed with the customer.

rudyW

How opinionated some of these responses are!

If you're living on a limited budget, getting billed twice in a month when you had no idea it was going to happen can be consequential: just when you think you can live within your agreed overdraft, certain you're not going to get billed until the same date next month, you find your supplier has claimed the right to take another hundred or two. That's distinctly unamusing.

I've worked out a few reasons Octopus will do this: 1. The day you install a smart meter. 2. When smart meter connectivity fails and recovers. 3.When tariff changes don't coincide with your normal monthly billing cycle. 4. When you offer your own reading. I've discovered all this in only 3 months. I'm sure there are lots of other reasons that fall into a general category of "exceptional events". That's even assuming your account is in order. If it's not I expect it gets even more complicated.

"Meters do not generate bills" true but silly. Smart meters create billing points for reasons as above that the supplier would not have had the opportunity or reason to do with traditional meters. That's one of the cases for having them installed, at least from the credit control perspective of the supplier.

"it is just called Variable Direct Debit." true. But unless you are an industry insider you won't understand the consequences of the fact that it's not actually "monthly", and the fact that you are (they claim) entering into a "14 day net" credit agreement with a calendar monthly normal billing sequence that will at times generate out-of-band billing points entitling them (they claim) to take a further payment so that your debt stays current (within 14 days) until the next regular date.

Actually, squirrelpie didn't post the right text from the website to make the point.

https://octopus.energy/blog/why-we-dont-send-monthly-statements/
"if you've opted to pay for your energy in full every month upon receipt of a bill, we'll send you a statement every month on your chosen day. If you've given us readings, we'll use those to calculate your charges. If not, we'll estimate how much energy you've used."

https://octopus.energy/blog/credit-refund-account-balance/
"With a variable Direct Debit you don't pay a set amount each month. Instead, we'll take a payment for your full bill shortly after issuing each energy statement."

So with no original research we can form a conclusion from these two premises which is: "we'll send you a statement every month on your chosen day and take a payment for your full bill shortly after issuing each energy statement"

Any logician, let alone a normal customer, will think this amounts to a "Monthly Variable Direct Debit" and, if this is the only wording that counts, it is!

The main reason many of us will be more than annoyed about all this is that we had no idea we had what our supplier has supposed is a 14 day net account and, even if we did, what its consequence would be on a variable DD. Probably like me the main reason anyone will have for a variable DD was to avoid all the nonsense of trusting our energy supplier to build credit balances for us and/or realising why that may well end in tears even with a competent, reasonable supplier.

And we will be harking back to our experience before all these modern tariffs with DDs offered us: probably net 30 days on a 90 day billing cycle, not realising that having the credit term less than the billing cycle introduces all these unexpected side-effects on debt obligation.

Most of all, we will be baffled as to why a supplier can't just offer a simple Monthly Variable Direct Debit product without all these side-effects, and why they didn't bother to tell us what they really had in mind, when they were bound to know what does happen in the face of exceptional events even on an account that is in order.

So, no, don't be discouraged by some of the flak here, I think we should be offered a better product and, as ever, terms should be conscionable, explicit and clear. I'm not having a tantrum: I know what product I want, the current one isn't it, I think it doesn't have the consequences the supplier thinks it has either, there's no reason a supplier with the will to do so can't offer the product I do want, and it is worth speaking up about.

EssexHebridean

Yes - for someone on a tight budget two DDs being taken in a month could be problematic, but if someone is on a variable DD then they should really have the money ring-fenced to deal with that - the reason why we usually suggest that VDD is best entered in to in the spring or early summer to give time to build up a “float” ahead of the more expensive. There is still an issue around it though - someone expecting just a single DD in a month could easily miss the fact that a second one is being taken - and then in turn that could of course see them going overdrawn.

Something like this happening occasionally - for example because of a tariff change - is one thing. If it’s happening regularly though I think I would be complaining. Of course, the other - and possibly easier - option would be just to switch to a straight monthly DD instead.

Kim_13

From reading another thread, Ofgem have not particularly well drafted rules about the level of credit suppliers are required to have on customer accounts. Those on a variable direct debit have none, dragging down the average, so until such time as we have appropriate regulation of the sector, payments being taken at bizarre intervals may be a price that needs to be paid in order for that payment option to remain available (as it likely nudges the figures to a slightly more favourable position as a customer does not owe them for as much energy.)

Smart Meters do not generate bills but it is a fact that they provide the suppliers the means to bill more frequently. In an ideal world, any irregular readings (temporary loss of smart communication in particular, since this is totally outside of the customer's control) would simply produce an extra line on the next bill, not an early bill. Billing if you enter a manual reading is understandable, since that must be the customer's preferred bill date or drawing a line in the sand due to a change of tariff. If suppliers need VDD customers to pay more frequently then they should bill weekly or fortnightly so that the customer can work to that cycle. Or only offer VDD to those with a history of managing their account well and bill once a month as would be expected.

No billing system is ideal - Pre Pay and Pay On Receipt of Bill clearly cost the supplier more to administer, but only the latter are paying for those increased costs. In fact they are probably paying to subsidise the former as well, now that Pre Pay has become the cheapest option as a form of social good. As are those on DD and having a credit balance, because the supplier gets an interest free loan while charging them more than those on Pre Pay (but of course no one really wants to resort to switching to that given it may make the property less attractive later, or mean that they have to pay to restore credit meters if it is rented.)

For the customer, it is now a choice of accept the least worst option. Pay a fixed amount monthly and gain no interest on a credit balance while losing protection against back billing, or have a variable DD and find the billing intervals varying as well as the amount.