Stop quarterly direct debit changes

tartantrousers

To keep things simple I'm going to round all numbers here.

I spend £600/ year on electricity including standing charges. That's £50/ month.

Every year though my company contacts me at this time of year and says "we're reducing your bill to £20/ month" because you've used less energy over the summer.

If do nothing... they then contact me in March and say (I'm big red worrying writing) you're in debt... we're increasing your bill to £90/ month.

A year from now if I've done nothing... I've spent £600 on electricity and am in credit so the reduce my bill to £15/ month

This happens every year... the numbers change but the concept consistent

I have called several times and been told "we legally have to do this"

I do now work out how much I'm likely to spend and adjust my direct debit automatically so that I end up, at the end of winter, ideally a few pounds in credit but... how legally required is this. Why can they not leave an average as an average and what can I do about it.

I'm lucky...I understand math and can sort this out but for others...90 vs 20 is a huge difference to budget for.

Peter999_2

Just change your direct debit to variable and only pay for what you actually use. It's very simple really so long as your energy provider supports it.

gm0

It used to be common. QVDD (Quarterly Variable Direct Debit). Bill me four times. Just collect what's owed in full. Quarterly bill. Variable to the estimated and actual usage readings as the quarters rolled by. Some bills bigger or smaller than others. Winter and Summer. Slight discount on quarterly bill and a "cash" a push payment (BACS) or a cheque you wrote after checking the bill - in return for having to trust them with a DD mandate. Older people didn't like "pull" payments where the provider could just do as they liked - assuming they had it right - and then you had the money gone and the complaining hill to climb. Push payments had their merits where the billing accuracy is suspect. But we live in a pull payment world mostly now.

Monthly payment plans for smoother payments were first made available as an option - not high winter. And low summer. So people could pay monthly and on account and smoother. Not utterly smooth. Monthly payment with quarterly bill/statement. Rolling. Smoother.

A lot of consumer moaning about the variability quarter to quarter - surprise winter bills. Led to more focus on budgeting plans with higher payments in summer to get into credit and drain it down in winter. For easier budgeting for people on the edge. There are no prizes for a "plan" meant to avoid surprise bills - which falls short and delivers - surprise bills. So a small credit balance error bar is nailed on in planning for tolerances and usage estimation.

Suppliers also spotted the cash flow advantage to them of building and holding credit balances across large numbers of customers - and were very happy to tilt the table with tariffs towards monthly billing and monthly payment plans as a default, a preferred, even a constrained option. Certainly an incentivised one. To the extent the regulator would allow. And let the games begin. The regulator is fairly complicit in this trend for various reasons.

So you can ask. And it may or may not be available easily in first line call centre or on the specific tariff you are on. It may be available - in combination with different prices - per unit and standing charge. Some suppliers will resist doing it more than others. And yes - partly because their compliance team says should. Because the regulator pushes certain things. And partly for selfish reasons.

Through some lenses the pay regularly approach is thought to be the better one to avoid debt and surprises.

Your experience with estimation and plan review bumping up and down notwithstanding

As you have seen the theory and the practice can diverge based on the billing engines and the maturity of the suppliers.

Swipe

https://forums.moneysavingexpert.com/discussion/comment/82101314#Comment_82101314

With VDD they can pay the same amount each month into their savings account

Qyburn

https://forums.moneysavingexpert.com/discussion/comment/82101354#Comment_82101354

Requires some month by month management though, unless their savings account supports direct debits.

Swipe

https://forums.moneysavingexpert.com/discussion/comment/82101360#Comment_82101360

From the OP, it sounds like their monthly usage is fairly static so if they don't want monthly management they could just leave a running balance of say £60 or a bit higher over the winter months , or make use of any interest free overdraft they may have. Not having council tax debited for February and March leaves me plenty of money in my current account to cover my Jan and Feb higher bills as I'm electric only.

gm0

Of course provided you are happy with the "not direct debit prices". Suppliers in many cases still support payment on bill. There is nothing stopping you running a small credit balance on push payment - old school Standing Order style. Setting a regular push payment of a fixed amount to those bank details. With the account number reference. Just ensure to stay ahead of the bills and of debt follow up for a negative unpaid balance. Fixed amounts each month. No payment plan amount reviews. Because there isn't a plan to review.

You won't get the cheapest price available in many suppliers. But you will get the desired convenience and control of the fixed amount

But it's your responsibility to track usage and staying ahead of bills as due. So no tears if that happens

And their billing system may find the whole thing situation odd and do mildly unexpected statementing which won't aid clarity. But it should be possible to identify a sane rolling balance due/not due.

victor2

I monitor my usage in great detail, nearly always get fixed tariffs and aim for a DD to give me a zero balance at my end of contract. When suppliers (and I've had several of the big names) try to adjust it, I contact them and explain why I want it left alone. They usually agree. One was surprised one month when I said I wanted to increase it slightly, but went ahead and did as I requested! Many have an online system where you can adjust it within certain limits. If you're OK with numbers, then it's not difficult to put the relevant data into a spreadsheet and work it out.

If you struggle working it out, the Monthly Variable DD isn't such a bad way to go, so long as you can budget for larger winter bills.