They're just shit at maths. ;-)
I always ignore my power company's estimates and just tweak my DD up and down as required. Very easy to do via the app if you're with Octopus.
Currently paying £10 a month until my positive balance comes down.
Tim
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During the last year consumer energy prices have come down twice, and are due to go down again from 1st October
My actual usage has come down slightly in the last year
I have ended-up over £600 in credit on the direct debit amounts they set a year ago
And still they want to put my monthly payment *UP* by 30%
Are they just shit at maths, or do they know more than they're letting-on about where prices will be heading in January?
Neither.
With interest rates so high, they can make a fortune investing the money they are "borrowing" from you at zero interest. I haven't been able to find out how many domestic customers EDF have in the UK, but if there are, for example, 1000000 paying an extra £500 a year, that gives EDF half a billion to get interest on. All it costs them is an internal admin charge. I wonder if that money is ever declared clearly on their annual accounts, or is buried in some other figure(s).
The prices may be going down but you will no longer get the £400 "Government subsidy" so in the real world the money you pay by DD may not have fallen at all.
According to their 2022 Financial Statement, from Note 9 Investment Income, the "Interest on bank deposit" was £79M, and "Other finance income" was £26M.
Oh it will be in the accounts all right, in terms of the money probably being used to pay down their *own* debt which will be *huge*.
In general you make more money paying down a debt than you do investing the money
I use the predictive graphics facility Octopus’ account to adjust my DD amount such that I’m just in credit over the next three months. Had I followed their suggested DD amount, I’d currently be £800 in credit, whereas ATM it’s itro £100.
As the temperatures fall an the heating gets turned on, I’ll adjust the DD accordingly.
Sure, one of the actual falls as only a few quid, but given I've ended-up in credit by more than the govt subsidy amount, I must already have be overpaying ...
The big energy firms signed up last year to being more open about how they set DD amounts so I'd start by seeing if EDF have done what they say they do
That includes for (most?) a refund if credit at the end of the DD year is over £150.
Ys, they sent a refund that still leaves me £260 in credit.
Scottish Power is worse than EDF for doing this in my experience. I've not had any attempt by EDF to increase my direct debit and last time they maintained it at the same rate despite my debit being several £100. The previous time they automatically refunded the credit balance of £373.92 that I wouldn't have objected to them holding onto a portion.
If you are that much in credit, your DD amount should be reduced not increased.
All energy companies try to get as much out of their DD customers as possible, on the basis that they can gain interest on the surpluses.
Take no notice of what may happen after January next, you are being royally overcharged at the moment.
It should be easy to work out how much your DD should be;
Annual kWh's * p/kWH + annual standing charge divided by 12, simples!
but, then, They're really Spanish. ;-(
How does £340 + 12 x (new DD amount) compare with the cost of your consumption over the past 12 months at current rates and standing charges?
ahem, that shd of course have been £240 + ...
FFS.
Sorry.
I'm off to drown my sorrows
Move to Octopus and just pay them for what you use. They just help themselves to payment for the exact amount of fuel I use at the end of each month by direct debit. You have to ask them to do it, but they changed to it immediately when I did.
If that's what he wants he could just ask EDF to switch him to "Direct Debit Whole Amount".
On sober reflection I'm not sure your question was rhetorical so FTAOD OFCOM emphasised last winter that suppliers must set direct debits based on currents tariffs, not on their view of price rises.
They aren't shit at maths, they might pretend that they are, but they have your money, a free loan.
It is a blatant rip-off.
Unregulated Direct debit was always a bad idea, open to exploitation. It is much better to have customers decide each month if the company has provided a good service and if they want to continue with it.
My answer would be to allow direct debits, average monthly payments, but to not allow any higher charges for customers who do not want to use them, and pay promptly.
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