Variable Direct Debit from Energy Companies

24

Comments

  • Smodlet
    Smodlet Posts: 6,976
    Name Dropper First Anniversary First Post
    Forumite
    edited 22 January 2020 at 6:11PM
    When I was looking to switch back in July, I was told by more than one of the Big 6, including EDF that, if I insisted on providing monthly readings, I would be charged on a variable, monthly basis i.e. pay for what I had used in the previous month. They insisted they wanted only bi-annual readings (without a smart meter) S0d that.

    The whole point for many is we want to pay the same amount every month, be it January or July, so we can budget. Given my experience, Gerry1 (with whom I usually agree) I cannot believe you cannot arrange with your supplier to bill you the way you would like.

    I work out my usage and what it should cost at least every month, then submit readings and, back in the halcyon days with nPower, checked my calculations against their graphs. Now I am with Eon, I fly blind because their website is woefully inadequate by comparison; oh, the irony when Eon now own nPower. This does not alter the fact I always know within a couple of quid what my balance should be.

    As we keep on saying to newbies, it is not difficult. Clearly, there is no one size fits all as I would prefer to receive a statement every month just to confirm what I think my balance is. Eon are supposed to offer this option but, the last twice I have requested this, it has not worked; rubbish website, imho.
  • Gerry1
    Gerry1 Posts: 9,891
    Name Dropper First Post First Anniversary
    Forumite
    Cardew wrote: »
    If the company can vary the amount of the DD(after review) it is by definition 'variable'!!
    Nope ! We're talking about two different things. I'm talking about a Variable Direct Debit which means that you read the meter each month and you are then billed by DD for that exact usage, not a penny more, not a penny less. That's the industry definition, e.g.

    https://help.shellenergy.co.uk/hc/en-us/articles/360001033877-The-variable-Direct-Debit

    https://www.moneysupermarket.com/gas-and-electricity/monthly-variable-direct-debit/

    https://help.cheapenergyclub.com/hc/en-us/articles/360000355288-What-does-monthly-variable-direct-debit-mean-

    You're talking about a Fixed Direct Debit where the expected annual usage is divided by 12 and the same fixed amount is collected every month. Of course, the amount will have to be recalculated after 12 months if the expectation turns out to be different from the reality, but that doesn't make it qualify as a Variable Direct Debit.
    Smodlet wrote: »
    Given my experience, Gerry1 (with whom I usually agree) I cannot believe you cannot arrange with your supplier to bill you the way you would like.
    Whenever I switch I always ask the new company whether I can pay by Variable Direct Debit, and they usually say they don't offer it. I've been with umpteen and the last one that offered VDD was First Utility (now Shell Energy), probably 10 years ago. Eco7, Avro and Yorkshire Energy didn't offer it.

    It may well be that VDD is offered only by the big boys such as E.On and EDF because the smaller, cheaper, leaner & meaner companies have more critical cash flows and can't negotiate such long payment delays.
  • Hi,

    Does anyone know why energy companies cannot do a variable Direct Debit to clear your account every month in the same way your mobile phone or internet provider can. I would prefer to pay my Gas/Electric every month in full like I do with all the other bills (Never a borrower nor lender be..)

    I can see the flat monthly payment DD evens out the bills if you stay with a company for a long time but at the switching point there is always a reckoning which negates the smooth monthly progress we are sold by the energy companies.

    Having experiencing several switches typically what happens is:
    - In winter you have a big bill to clear on the old account plus possibly a new DD taken by the new provider before the switch is complete. Tricky if it happens in December... (£100, £100, £100 - this is going well - time to switch final bill £250 plus £120 for the new provider...ouch)
    - In summer you have to wait 6,7,8 weeks for the final bill and repayment which is just annoying :D

    I'm guessing the business model is based on advance payments rather than historic payments but given there is an ahead/behind thing going on all the time surely a net zero picture works just as well. I know you can keep an eye on it and over pay if its getting behind but its just too much fuss when all of the other bills sort themselves out so well.

    Anyone know any more?

    They can, and some do - although quarterly billing is oftne the norm.
    The ones that don't decide for their own business reasons not to

    Consult a comparison site, and apply filters to pay on receipt of bill. Then look to pay that by DD.
  • fira
    fira Posts: 96
    First Anniversary Combo Breaker First Post
    Forumite
    Definitely check out the link Gerry1 gave you for Shell Energy. I switched to them around 6 months ago, saved a good few hundred pounds in doing so and I chose to pay by monthly variable direct debit. On the same date every month I input my gas and electricity readings online (they also email me a reminder), I can review the bill in less than a week and my bank account is debited around 10 days later with the exact amount I've used.

    It works perfectly for me and I only chose this way of paying as I'm a bit of an oldie now and before moving to Shell paid quarterly, by cheque. I know it's a personal thing but, for me, I prefer not to have a fixed direct debit.

    Bill
  • EDF bill me monthly in arrears from my automated smart meter readings and then take that exact amount by direct debit about 14 days after the bill is produced.

    I am very happy NOT to be lending them any money interest-free !
  • Cardew
    Cardew Posts: 29,036
    Name Dropper First Anniversary First Post Rampant Recycler
    Forumite

    I am very happy NOT to be lending them any money interest-free !


    Many of us on the normal 12 equal payment DD scheme are in debit for some months of the year so the company are lending us money interest free. My account 'emerges' from the winter in debit and that debit is paid off during the summer.


    I have calculated that this year with my savings in my current account earning 1.1% I will have saved almost 15p (15pence)in interest - a real show stopper.


    Take a case where a company set a DD too high, and it wasn't corrected or challenged, such that the account was in credit by a very high average balance of, say, £50. At 1.1% you would be giving them 'interest free' a massive 55p(55 pence).



    In practice that 'extreme' case in the paragraph above shouldn't happen if the company followed Ofgem's rulings on DD payments
  • Gerry1
    Gerry1 Posts: 9,891
    Name Dropper First Post First Anniversary
    Forumite
    Smodlet wrote: »
    Gerry1 (with whom I usually agree) I cannot believe you cannot arrange with your supplier to bill you the way you would like.
    In an email sent today, Gulf Gas & Power UK state:-


    Thank you for your email querying a possible variable Direct Debit.

    Allow me to share with you that as per the Terms & Conditions of the contract, all domestic customers are required to be set on a fixed Direct Debit.
  • Ovo seem to like fixed DD. But you can change the amount yourself whenever you want. so you could do so each month. But as they also give 5% interest on any credit balance, offering more than any bank on a current account, a more sensible approach might be to review the DD every 3-4 months.
  • Smodlet
    Smodlet Posts: 6,976
    Name Dropper First Anniversary First Post
    Forumite
    nickod wrote: »
    Ovo seem to like fixed DD. But you can change the amount yourself whenever you want. so you could do so each month. But as they also give 5% interest on any credit balance, offering more than any bank on a current account, a more sensible approach might be to review the DD every 3-4 months.

    An energy company pay interest on your credit balance? I think I have just entered an alternative universe, which is not to say I don't believe you, nickod.

    Back in the day, before The Word (:money:) came to Planet Smodlet I was, on rare occasions, in credit to nPower to the tune of 4 figures. :o:o:o I know, I know but we all have to learn, right? It will never happen again while I retain my faculties (such as they are)

    Had I earned 5% on those balances, which were quite frequently in 3 figures, I would have been laughing. I do remember telling nPower on several occasions that I did not bank with them so they should reduce my DD. They usually did but I should not have had had to ask them... I am pretty sure I got more compo out of them for various things than I would ever had earned in interest so not such a daft Smodlet, after all. :D

    Still miss their graphs a whole lot. Malc, is there anything you can do to suggest Eon use some of what they appear to have bought for the benefit of customers? I hope some (most) of nPower's customer service staff have kept their jobs and will be available to Eon customers before too long; many of them were really good: Some were appalling. So it goes, I guess.
  • st999
    st999 Posts: 1,574
    First Anniversary Name Dropper First Post
    Forumite
    I prefer my DD to be higher than what I use because Santander gives me 2% of the DD every month.

    Better than any savings accounts.

    Where else can I get £1.82 interest per month on £91?
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards