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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 9th Apr 13, 9:46 AM
    • 2,324Posts
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    Former MSE Helen
    MSE News: One in five households 'owe energy firms cash'
    • #1
    • 9th Apr 13, 9:46 AM
    MSE News: One in five households 'owe energy firms cash' 9th Apr 13 at 9:46 AM
    "The number of families in debt to their energy supplier is rising, says uSwitch..."

    Read the full story:

    One in five households 'owe energy firms cash'



    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

Page 1
  • Wywth
    • #2
    • 9th Apr 13, 10:11 AM
    • #2
    • 9th Apr 13, 10:11 AM
    Another press release by Ann Robinson

    Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “The soaring number of households in debt to energy suppliers is a clear indication of the pressure people are coming under just to meet the cost of their basic bills. The fact that a million more households have fallen behind in the last year so that over five million are now in debt to suppliers tells us everything we need to know about the impact of sky-high energy prices.
    “The important thing for households is to try to keep a lid on energy costs. There are two simple ways to do this - use less energy by making our homes more energy efficient, perhaps by taking advantage of the Green Deal, and paying less for the energy we do use by switching to the most competitive tariff for our needs.
    ... perhaps by using a site such as uSwitch?

    ... and MSE Martin claims this site is free of adverts, when perhaps what he means is it is full of free adverts ...


    As we approach the end of perhaps one of the coldest, most prolonged winters in recent times, it is no wonder many are in debt to energy providers at this time, especially if they pay monthly by DD.

    However, if they switch supplier, they will need to repay this debt immediately (unless they can negotiate a repayment plan)

    1. When asked ‘Thinking about your most recent energy bill from your supplier, which of the following best applies to you?’ 20% of respondents answered that they were in debt. 20% of 26 million is 5,200,000 households, or over 5 million. The mean amount of those in debit was £122.51. In 2012 the mean debt was £131.33.
    So actually, on average, less is owed this year per customer than last year, based on the small sample of data.
    So not really a story at all, just a free advert for uSwitch who are probably struggling at present with none of the energy providers changing prices, so few users looking to switch.

    However:

    3. When asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how does this compare with a year ago?’, 41% of respondents answered ‘My debt/arrears is higher’ and 9% responded ‘my debt/arrears is lower’


    Proof, if proof were needed, you can make statistics show whatever you want ... or just create a reason to advertise uSwitch if necessary

    Finally:
    5. When asked ‘Thinking about the amount you are in debt/arrears with your energy supplier, how are you going to pay it off?’ 45% answered ‘By increasing my monthly direct debit’, 22% answered ‘I’m hoping it will go down naturally over time’, 22% answered ‘By lump sum’, 8% answered ‘By agreeing a repayment plan with my energy supplier’, 2% answered ‘By going on a prepayment meter’ and 2% answered ‘Don’t know’.
    Last edited by Wywth; 09-04-2013 at 10:28 AM.
    • MillicentBystander
    • By MillicentBystander 9th Apr 13, 10:42 AM
    • 3,450 Posts
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    MillicentBystander
    • #3
    • 9th Apr 13, 10:42 AM
    • #3
    • 9th Apr 13, 10:42 AM
    For once (probably! ) i agree with every single word you have posted, Wywth. Encouraging people to switch at this time of year (and especially with the weather we've been getting lately) is not the best idea given they will have to repay what is probably a large debit amount almost immediately before being allowed to switch. Some may even still be in exit penalty period as well. One of the (many) sad consequences of the privatising of the energy industry - the rise of commission-based switching sites.
    Last edited by MillicentBystander; 09-04-2013 at 10:45 AM.
    • mr_jrt
    • By mr_jrt 9th Apr 13, 10:56 AM
    • 51 Posts
    • 21 Thanks
    mr_jrt
    • #4
    • 9th Apr 13, 10:56 AM
    • #4
    • 9th Apr 13, 10:56 AM
    Though of course, any debt owed to the energy firms by your DD payments not meeting your usage is interest-free, so paying it off any sooner than you have to is foolish when that money could be working harder elsewhere.
    • argomatt
    • By argomatt 9th Apr 13, 11:54 AM
    • 252 Posts
    • 806 Thanks
    argomatt
    • #5
    • 9th Apr 13, 11:54 AM
    • #5
    • 9th Apr 13, 11:54 AM
    I'd rather be owing money to the utilities than them owing it to me,

    It is not that long ago they used to insist on larger and larger direct debits, building up a huge credit balance and then being difficult when consumers asked for it back.
    DFBX2016 #024
    Target = £10804
    Paid = £2434
  • jamesd
    • #6
    • 9th Apr 13, 12:45 PM
    • #6
    • 9th Apr 13, 12:45 PM
    Lets consider:

    Not in debt to their supplier: the consumer has probably paid in advance due to monthly charging.

    In debt to their supplier: It's spring. Around the time of bills covering the winter period that will be repaid by a normal direct debit over the summer. And these consumers have not been giving their supplier a free loan.

    In debt to their suppliers is the best situation for a consumer to be in. It means they aren't giving their supplier a free loan.

    A survey such as this would be more meaningful if conducted around October or November, when the summer fixed direct debit payments will have eliminated most debts that are just due to normal seasonal use variations. At the current time of year it's highly desirable for consumers on fixed direct debits to owe their supplier money.
    Last edited by jamesd; 09-04-2013 at 1:37 PM.
  • Wywth
    • #7
    • 9th Apr 13, 12:47 PM
    • #7
    • 9th Apr 13, 12:47 PM
    For once (probably! ) i agree with every single word you have posted, Wywth. Encouraging people to switch at this time of year (and especially with the weather we've been getting lately) is not the best idea given they will have to repay what is probably a large debit amount almost immediately before being allowed to switch. Some may even still be in exit penalty period as well. One of the (many) sad consequences of the privatising of the energy industry - the rise of commission-based switching sites.
    Originally posted by MillicentBystander
    Any amount owed will normally be billed after the switch, not before.

    A supplier cannot block a switch unless a large amount is actually owed, and it's not officially owed until at least 28 days after it has been formally demanded.

    Most people who pay monthly will not normally receive any formal demand (before they switch) as all that will normally happen in the worst instance is that the monthly payment will be revised upwards
    • wakeupalarm
    • By wakeupalarm 9th Apr 13, 1:18 PM
    • 738 Posts
    • 316 Thanks
    wakeupalarm
    • #8
    • 9th Apr 13, 1:18 PM
    • #8
    • 9th Apr 13, 1:18 PM
    In reality it means 80% are in credit to their energy company. Perhaps the articles title should be Energy companies earning millions in interest holding onto customers money.

    “The soaring number of households in credit to energy suppliers is a clear indication of the pressure people are coming under just to meet the cost of their basic bills. The fact that a million more households have fallen into credit in the last year so that over twenty million are now in credit to suppliers tells us everything we need to know about the impact of direct debit manipulation by the energy companies".
    • molerat
    • By molerat 9th Apr 13, 3:07 PM
    • 20,627 Posts
    • 14,894 Thanks
    molerat
    • #9
    • 9th Apr 13, 3:07 PM
    • #9
    • 9th Apr 13, 3:07 PM
    It's worse than that guys, look what the Daily Fail has to say http://www.dailymail.co.uk/news/article-2306066/Five-million-families-face-cut-falling-energy-bills.html?ito=feeds-newsxml

    Five million families face being cut off after falling behind on energy bills
    • Average families owes £123 to their energy supplier
    • Report finds energy bills are £831 higher than in 2004
    Not in the least bit alarmist
    Last edited by molerat; 09-04-2013 at 3:10 PM.
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  • Wywth
    It's worse than that guys, look what the Daily Fail has to say http://www.dailymail.co.uk/news/article-2306066/Five-million-families-face-cut-falling-energy-bills.html?ito=feeds-newsxml
    Five million families face being cut off after falling behind on energy bills
    • Average families owes £123 to their energy supplier
    Report finds energy bills are £831 higher than in 2004
    Not in the least bit alarmist
    Originally posted by molerat
    Love this at the end:
    Michael Fallon, the Energy Minister, said he had ‘rarely seen a worse case of consumers being misled so badly.’
    ...
    'All the major companies have signed up to a commitment to never disconnect a customer who is vulnerable.’
    • chinagirl
    • By chinagirl 9th Apr 13, 8:06 PM
    • 858 Posts
    • 1,163 Thanks
    chinagirl
    No escape, in too deep!
    I'm one of those families. We owe large amounts to EDF and its totally their fault.
    We were paying a DD for gas and DD for electric. They wrote to me to say they would combine the bills and work out just 1 x DD to cover both gas and electric. This would be done automatically and I, the customer, need to nothing. The new combined DD did seem a little low, but I thought as the experts, they must be able to look at my gas consumption and work out a fair amount.
    So, 9 months later, they come to read the meters and say I have been vastly underpaying for my combined Gas and Electric. Whose fault is that??? The upshot, is I now owe roughly £400 which would be roughly the gas usuage for the year.
    To add insult to injury, I now have been forced to enter a Repayment Plan, making my combined DD for the gas and electric £186 per month

    Where's the justice in that!!! I have been on the phone trying to make them see that this amount owing is purely down to them, because I had been paying exactly what they requested me to pay, so how come I am now responsible for their mistake. I argued, how can I be sure the new amount I have to pay is correct. How do I know that in 9 months time, they wont come to me again and say I owe them more money??
    I have lost all faith in energy companies. Unfortunately, money is so tight, I have no option but to stick with them, as I cannot afford to pay a final bill if I did switch.
    keep smiling,
    chinagirl x
    • Nada666
    • By Nada666 9th Apr 13, 9:25 PM
    • 4,868 Posts
    • 3,886 Thanks
    Nada666
    So, 9 months later, they come to read the meters and say I have been vastly underpaying for my combined Gas and Electric. Whose fault is that???
    Originally posted by chinagirl
    Yours?

    {dwarves plus little pigs}
    • Nada666
    • By Nada666 9th Apr 13, 9:31 PM
    • 4,868 Posts
    • 3,886 Thanks
    Nada666
    How do I know that in 9 months time, they wont come to me again and say I owe them more money?
    Originally posted by chinagirl
    The meters are in your home. You ought to know how much you use in a typical year. How much does that cost on your tariff? How much are you paying?

    If you don't want to do this then you can pay quarterly instead.
    • jeepjunkie
    • By jeepjunkie 10th Apr 13, 8:21 AM
    • 1,531 Posts
    • 1,397 Thanks
    jeepjunkie
    I'd rather be owing money to the utilities than them owing it to me,

    It is not that long ago they used to insist on larger and larger direct debits, building up a huge credit balance and then being difficult when consumers asked for it back.
    Originally posted by argomatt
    Agreed, I run a really tight ship. My DD matches consumption and npower hate that. After the winter bill I was about a tenner in credit. They never miss an opportunity to try increase the DD by unrealistic amounts always saying they'll refund me after the next review... From experience it is incredibly difficult to secure that refund...
  • daveeeeed
    In reality it means 80% are in credit to their energy company. Perhaps the articles title should be Energy companies earning millions in interest holding onto customers money.
    Originally posted by wakeupalarm
    Yes, I like that. 4 out of 5 households do not owe money to their energy company. I wonder how that compares with the proportion of people not owing money to their credit card company.
    Or is this a play by the energy companies to be allowed to start charging interest on the "debt" owed by the 20% (whilst not paying interest on the credit to the 80%)?
    • molerat
    • By molerat 10th Apr 13, 10:57 AM
    • 20,627 Posts
    • 14,894 Thanks
    molerat
    A few years back I built up a debt with E.On of around £650 because my DD was set too low. The difference here compared to others posting is that I knew how much I was using and how much I was underpaying so the extra money was keeping itself cosy in a savings account. When they eventually got their act together and decided I had to pay more they gave me a year to do it, again the money came slowly out of the savings account.

    The moral here is that it is down to you to keep an eye on what you are using. The problem is that most are too busy or too idle to bother and blame someone else when it comes back to bite them on the bum.

    I have a simple excel spread sheet set up where I can enter my readings and it will instantly show me how my account stands. It is not difficult if you can be bothered.

    Currently my account is £200 in debit and forecast to be £100 in debit by annual reconciliation date, I know that my DD is £10 too low so that money is tucked away safely for when it is needed, why should they benefit from my money
    Last edited by molerat; 10-04-2013 at 11:04 AM.
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    • Jennifer_Jane
    • By Jennifer_Jane 10th Apr 13, 11:00 AM
    • 3,157 Posts
    • 4,365 Thanks
    Jennifer_Jane
    I currently owe about £371 having paid in my Winter Fuel Payment of £200 in November. I am dreading the next bill, but realise that my monthly dd should be higher (it's £37 per month for dual). I will watch it over summer and see how much I can catch up.

    We have just had a new rate announced so I'll be checking that on uSwitch soonest. I keep a monthly spreadsheet of usage with a graph showing how it's going.
    • Pincher
    • By Pincher 10th Apr 13, 12:55 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    I would love it if they let me pay in advance to secure a good price. Imagine, if they let me pay for 100,000kWh at E.On FixOnline 8 prices three years ago.

    If they created a Luncheon Voucher type currency, it would stop grannies using the money to buy presents for ungrateful grandkids and use it for not freezing to death. The currency would be denominated in Gas kWh. Conversion into Electrical kWh should be by a published multiplier. It should be redeemable online or by phone by reading out the voucher number. The DWP can send out the vouchers with a Christmas card. Relatives of poor people can send them as birthday presents.

    It's like a first class stamp, once you paid for 1,000kWh, that's fixed. The standing charge will still have to be paid for by the account holder, unfortunately.

    Assuming there's a good take up of these vouchers, there would be a cash reserve. This allows the creation of a National Gas Reserve. In normal circumstances, you don't want to tie up £millions in the form of gas, but this is gas ALREADY PAID FOR. We wait for low spot rate to buy in gas on the cheap, but the intention is to fill up the reserve over summer, and run it down during winter. Obviously, voucher redemption implies releasing gas onto the National Grid. As we buy the gas, we know how much we paid for it, and we can set the price for a tranche of vouchers. which will reflect the wholesale purchase price. The DWP gets the cheapest price for the Winter Fuel vouchers.

    The vouchers can be investments. Householders can buy them to hedge against price rises: use them if price goes up, keep them for next year if price stays low. The government can hand them out to Benefit recipients. You can give them to elderly relatives.
  • daveeeeed
    I currently owe about £371 having paid in my Winter Fuel Payment of £200 in November. I am dreading the next bill, but realise that my monthly dd should be higher (it's £37 per month for dual). I will watch it over summer and see how much I can catch up.
    Originally posted by Jennifer_Jane
    Not wishing to insult your intelligence but if you turn everything off and don't use any gas or electric it will take exactly 10 months to pay off this debt.
    If you use more than £37 worth a month (I don't know your circumstances but I would be very surprised if anyone living in a house/bungalow used this (or less) once standing charges etc are included - even in the summer) then your debt will increase.
    My advice, for what it is worth, is work out your average use over the year, then revise your D/D so that the total annual payment covers this usage.
    That way your debt will not increase any more. Nor will it reduce so you will still need to work out a plan to pay off the £371 debt.
    Your energy company should be able to help/advise you with all of this.
    HTH
    • Consumerist
    • By Consumerist 10th Apr 13, 3:44 PM
    • 5,192 Posts
    • 2,600 Thanks
    Consumerist
    Personally, I think this "story" is merely an opportunity for MSE to ADVERTISE its cheap energy club.

    Shall we now call MSE the Cheap Marketing Club.
    Warning: In the kingdom of the blind, the one-eyed man is king.
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