You need a better supplier! I`m with Ebico, and when I contact them to discuss my payment they ask "How much do you expect to use". I told them how much we spent last year, and we came up with a figure that seems fairly accurate. It`s ended up being on the high side because we`ve cut down what we use, but if we hadn`t it would have been pretty much spot on for the course of a year. As it is I`d rather build up a bit of a credit balance now, so if prices go up then it`s a bit of a buffer. if prices go down then we`ll get a decent lump sum out of them. :-)
One might as well put the money in a box under the bed.
If one wants to put money away to pay the bills, then there are two obvious things to do.
a) Negotiate a DD payment rate with the energy supplier as far as possible below the usage rate that they will accept. Push them on this with the threat of going elsewhere. The effect of this will be that the shortfall will not be paid to the supplier until the end of the accounting year, or even better rolled forward to be spread into the following year.
b) Look for a savings account with appropriate access notification and maximum interest. Set up a DD into that for a little more than the difference between the projected cost of energy to be used and the payment being made. At the end of the accounting year, use the money to pay the shortfall or go on rolling it up into future years.
Alternatively, I will be very pleased to supply the details of my Paypal account to anybody wishing to lend me money at zero interest.
Definitely. We are talking about commercial companies here, not charitable organisations.
I am certainly not one for spending time on things that make a minimal financial difference but take a lot of time. Far from it.
However.....
One can just stay with BG (or whatever other supplier) year in, year out, let them set up the DD and change it when they feel like it. Curiously, some people are happy to do that.
Personally I am not.
Therefore if one is going to take the trouble to look at changing energy suppliers on the basis of energy used and pricing, and to make a decision about supplier based on that, then there are a few basic things to do, such as to check meter readings periodically for actual usage patterns and possibly project usage forward. The next step is to look at sources of information (not just the internet calculators) for tariffs that match pattern of use and then switch supplier accordingly.
I am sure that some people do this monthly or quarterly. Personally, I do it twice a year or if there is a substantial pricing change by the incumbent supplier. It takes me typically no more than half an hour each time.
I could just leave it at that and with either the incumbent supplier at the start of the new accounting year or the new one, I will negotiate the lowest DD figure that they will accept. It is surprising what they will accept if pushed - a new supplier wants to win business and an incumbent to retain it. At present I am projecting having paid for about 75% of actual usage for the accounting year at the end of the year. The shortfall will be added to next year's projection and payments to 75% of that will be discussed.
All of the work is in identifying suppliers and whether to change, and a fair number of people do that anyway, even if only once a year. I line up four choices in order and then make a phone call to the first offering them my business and the amount I am willing to pay. This is never more than a 2 minute conversation.
I maintain a household account (wife's name because she is not a 40% tax payer as I am, so tax on interest is less) into which a DD for the shortfall is paid. This account also receives DD amounts for write down of domestic appliances and so on. Periodically, the account is moved to obtain the best interest rate offers.
So the point is that if one is doing the supplier switching thing, and checking it reasoably well, most of the work is in that. I am sure that you will agree that that is usually worthwhile.
The incremental work to ensure that they are lending me money rather than the other way around is negligible - perhaps 10 minutes a year. I can make of the order of £25 in interest in a year from the energy supplier which is worth 10 minutes.
Why - at the moment we`re £40 in credit on gas, and £45 behind on the electricity (a bit of a c*ck-up in the billing department due to the change over dates and payment dates not quite meshing properly).
And? So I lend them £100, maybe £150 at a maximum, so I`m losing about £5 a year in interest at most. It`s not worth bothering about - if £5 is that important to you then fine, but £5 isn`t worth the agravation of constantly changing my payments depending on the weather, mood, time off work and all the other factors that change my consumption.
Which means that I can keep my payments at the current level for a while - perhaps I`m doing this for a good reason? perhaps (for example) my partner will be getting a £6k pay rise this time next year, and between now and then we need to budget as well as possible, and knowing that our bills will be exactly £x a month is worth the loss of approximately 41p per month.
Ahh right, so someone doesn`t agree with you, they must be a lottery player? The fact is that some people consider the lottery to be a valid way to spend their money - the loss of say £5 a week on lottery tickets is affordable, the conseuqences if they won a multi-million prize are worth that to them. Personally I don`t play at all, but that is my choice. Presumably you don`t insure your house or contents, for the same arguement behind not playing the lottery? On average you`d save money by not doing so and putting the money you would have paid into a seperate fund - correct?
For the sake of changing my payments every month/3 months depending on useage, it`s not worth the messing about and phone calls IMHO - the payments are set at a level that is affordable for us, and for the sake of 41p a month in lost interest (as found in another post) is it REALLY worth sitting down and even doing the maths? Even if my time where only worth £10 an hour, that`s only 2.5 minutes a month I`d have to deal with the changing payments before it became uneconomical to do so.
So why haven't you asked for a refund on the gas? Never mind about the electricity.
For such a small amount, I would agree. It's certainly financially interesting for a few of minutes of phone calls to make £25 in interest.
You could achieve exactly the same and make some money out of it by sweeping a fixed amount of money into your account rather than theirs.
Not really. It's just an indicator of outlook.
It's also known as taxation for the gullible.
That's good then.
Not an equivalent comparison. It isn't possible to cover the sum insured by saving the premiums, even for a considerable number of years. The probabilities are of course low, which is why premiums are low as a proportion of sum insured.
Insurance companies employ people called actuaries to work all this out. These are people who found a career in accountancy too exciting for them.
Of course, insurance of domestic appliances is a different matter. Personally I write them down over 10 years and save a tenth of the purchase price plus 10% per annum in the household account. This turns out to be quite a conservative estimate because I buy Miele appliances and they tend to have a 20 year lifetime. After 10 years of doing this, I have enough in the account to replace all three of them at today's prices and top of the range models, so from next year I can back off the rate of saving for this and direct the funds elsewhere.
Why does it? I stated that if I ran up a £100-£150 credit, that would be the situation. That is completely unrelated to my actual energy spend, only the difference between that spend and my monthly payments.
Have you bothered reading the rest of my posts, regarding my reasons for not chasing such a tiny amount of money?
So you have a credit balance in your energy accounts of upwards of £500?
Which involves have a bank account for that sole purpose, having to remember to set everything up to do so.... Is your time REALLY that worthless?
No - you disagree with the lottery, that is all. I don`t play it myself, but thats my decision, nothing more. It`s certainly not an indication that the lottery is evil and must be punished.
But it isn`t possible to save up enough over the average human lifetime by paying in a few quid a week, hoping to match a lottery jackpot. £1 to win £10,000,000 for example - 10 million weeks is hundreds of thousands of years, certainly longer than i`m expecting to be able to save up. It`s a similar arguement for house insurance - it would take a very long time to save up enough to cover the maximum impact, a full rebuild for example, but on average the insurance company makes money out of you by charging you more than it will cost them. Therefore, surely house insurance is a taxation for the gullible?
Oh no. It's pretty expensive. However if there is free money to be made for little outlay of time, as in this case, it is rather silly to ignore it.
Not at all. I think it's great.
People put their money into it of their own free will. Some of that money is spent on things that would otherwise need to be funded by the taxpayer.
Unlike other taxes, I can choose not to pay. It's a brilliant way to organise taxation. I think that there should be more of it.
Definitely not. I'm all for it.
Of course. All of which is why it's really pointless.
However, let's keep that secret from the 95% of the population who haven't figured it out.
Not really. There's nothing wrong with making a profit. I can get some of that back through investments.
The rquation is different. The issue is not what it costs the insurance company to provide the service but what my risk/return is in having or not having the insurance.
But those figures have absolutely nothing to do with the figures I quoted to make my arguement, you`re moving the goal-posts halfway through a conversation!
No I'm not. You introduced a set of figures part way through the discussion based on your experiences and objectives. I did the same as an illustration of mine and to explain why I find it financially interesting to retain control of money paid to suppliers.
Another issue to consider if you like to lend money to energy suppliers is that they can take a very long time to repay it if you are in credit and wish to change suppliers. If you owe them money, the situation is entirely different.
All of this is before the more philosophical discussion that suppliers should be kept aware of who the customer is. In other words, if I choose to do business with an energy supplier, it's going to be on what I consider to be acceptable payment arrangements, not what they do. That is not to say that I want to be unreasonable about that, but it certainly doesn't include lending them money at any time.
But that point is irrelevant, since I also have control of the money I pay to my suppliers. I told them the amount I wanted to pay, and they have accepted that. Therefore I have full control over this.
If you have problems obtaining payment from a supplier like this then you are going about it the wrong way. It`s a very simple process - you give them (say) 14 days to issue a refund, after which you will be charging them interest at 8%, as well as the court fees, balif fees etc needed to get the money from them. On the 14th day you issue a claim through the small claims online system, and include said fees etc. They then either pay up immediately, including your fees, or you get to have a bit of fun in court, and again get your money back quickly. Worst case is you get to send the baliffs in! having said that, i`ve never had to go beyond the threat to go to court, as most companies simply don`t need the agravation of an arguement with someone who has free access (both in terms of availability and cost) to a solicitor.
Which is YOUR opinion, nothing more. I have the same requirement for my suppliers, that they remember that I am the customer. I just choose not to be as picky about a few quid, it`s really not worth the effort of doing the calculations each and every single month. As i`ve said before, if your time is of that little value to you then fine, my time is worth too much to waste it on the phone during office hours fannying about to save a few pence a month.
Incidentally, your newsreader seems to be configured to have lines that are longer than standard.
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