Direct Debit Gas And Elec - They Keep Your Money!

maggiebiz

I pay by monthly DD for dual fuels. Supplier is EDF but through Sainsburys Energy. I would recommend them on price - really cheap by comparison to others - but they are scamming on the DD payments. My latest gas bill was £170 in credit, after a quarterly bill of £70 and on a monthly payment of £40 -this for the Feb-Apr quarter. They did not offer to reduce the payment or refund the credit. When I rang them they offered first to reduce to £30 per month which I pointed out would leave them with maybe £90-£100 of my money at the end of the next quarter (plus we are entering the summer season). Then after some behind the scenes consultation they offered £20 -this is obviously not a scientific process but a case of how much of your money they can hang on to while you get no interest.

I told them to stick it, got a refund, changed to quarterly direct debit and will save the monthly sum in my high interest savings account - this will more than compensate for the measly DD discount (assuming you don't get that for quarterly DD - I'm not too sure). So do insist on a reduction or refund if you are overpaying too much monthly.

Cardew

maggiebiz wrote: »

I told them to stick it, got a refund, changed to quarterly direct debit and will save the monthly sum in my high interest savings account - this will more than compensate for the measly DD discount (assuming you don't get that for quarterly DD - I'm not too sure). So do insist on a reduction or refund if you are overpaying too much monthly.

That generally is very bad advice!

The Direct Debit discount with most companies is far more than you will get in any high interest account.

Work it out: Take a nice simple case of an annual bill of £600 a year i.e. £50 a month on a DD.

At the end of Month 1 you put £50 in bank, at the end of month 2 you put in another £50, at the end of month 3 you take that money out and pay your £150 bill. - same for the next 3 quarters.

So your average amount invested in the bank throughout the year is £75.

So assuming you can get 6% gross(4.8% nett) you will earn £3.60 a year interest. Obviously less on your £40 monthly bill.

So that works out at a 0.6% discount; some firms offer 10% discount for payment by DD.

Incidentally are you sure of the accuracy of this statement?

"Sainsburys Energy. I would recommend them on price - really cheap by comparison to others"

maggiebiz

Thank you for your comments. If you read carefully I did not advise anyone to stop paying by monthly DD, that was my personal choice in the face of the company's approach.

What I did advise was that people should not allow their credit (i.e. money being held by the energy company) to build up unnecessarily or their payments to be kept artificially high. THAT is the money you could be saving elsewhere. And of course you only get the DD discount on the actual bill - not on all the money they hold in your account (e.g. in my case the £170 credit).

And yes I am sure I have the best deal because I review it regularly. £480 roughly (don't have exact figure to hand) over past year before any discounts for a three bed house with two adults working from home complete with computers and all usual appliances in regular use.

Cardew

You stated that "I

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will save the monthly sum in my high interest savings account - this will more than compensate for the measly DD discount"

I stated that this was generally bad advice as it won't save money; and I will wager it won't save you either.

woozywendy

I used to be with edf in my old house and whenever I was in credit at the end of the winter bill I phoned and asked for a cheque to be sent out, it took about a week for me to receive it. They always asked if I wanted to reduce my monthly amount but I always said no.