Got an email about your Direct Debit going up? Here’s what’s happening
If you’ve just received an email from us suggesting a bump in your monthly payments, don't panic. These are routine checks designed to protect you from debt, and you’re in control. Don't agree with the amount? You can log in and tweak it – and you can always talk to us. It’s your money.
Why we review your payments
People usually use about 50% more energy in winter than in summer. Instead of paying tiny bills in July and big ones in January, most of our customers prefer to smooth out those peaks and troughs into a flat monthly amount.
To do that, you need to build up a “piggy bank” of credit in the summer that you dip into during winter.
Would you rather pay for exactly what you use each month? No problem. Check out our full guide to variable Direct Debits.
FYI: your Direct Debit is not the same as your bill
Your Direct Debit is the steady amount you drop into the piggy bank every month.
Your bill is us opening the piggy bank once a month to take out the exact cost of the energy you actually used.
If we open the piggy bank and find it empty, we’ve still got to charge you for the energy you used, leading to a stressful bill you hadn't planned for. But we don’t want the piggy bank to overflow either: money is tight for everyone right now, and if our maths is off and we’ve told you to put in too much, we want to give it back.
Enter: payment reviews
Payment reviews aren’t always hikes: we also suggest paying less if it makes sense for you. Right now, because of recent price changes, and uncertainty about the future due to continued conflicts around the world, more people are being advised to pay more. But we never bump up payments for the sake of it.
What does a 'healthy' account actually look like?
Because your energy use swings with the seasons, our target is for you to make it through the winter months with enough wiggle room to avoid a sudden high bill. A “healthy” account means:
Your monthly payment x 12 = your annual energy costs
Your balance is on track to be close to zero by the end of April (because you’ll be heading into summer then, when your bills should be smaller. We don’t want to hang on to a penny more than we need to).
If our payment reviews look ahead and see your balance tracking below zero by April, we'll suggest a payment increase. We take the shortfall, divide it by 12, and add it to your monthly payment to spread the cost out gently.
Why we might suggest an increase (even if you're in credit)
Even if your balance looks healthy today, we might recommend bumping up your payments if:
You might not have quite enough: Even though you’re in credit, you might not have enough to get you through the winter, when energy consumption tends to be much higher.
You claimed a refund: If you recently took back a chunk of your built-up summer credit, your winter safety net got smaller, so you may need to rebuild it to get through the colder months.
You’re using more: You might be using more than before because of new appliances, spending more time at home, or other lifestyle changes.
Energy prices have changed: The baseline cost of energy has shifted, meaning your payments need to adapt just to cover the same amount of power. Basically, you need a slightly bigger piggy bank.
Taking the guesswork out: your Balance Forecast
We want you to see exactly what we see. We've built a Balance Forecast tool into your online account that plots where your energy balance is heading over the next year. It does the maths for you, so you can see why a payment bump makes sense (or whether you have breathing room to take some credit out). Check out our full guide on how to read your Balance Forecast here.
You’re always in control
We run our payment reviews based on your meter readings, but ultimately, you know your home and your finances better than we do.
We always give you plenty of notice before your payment changes, so if you think our estimate is way off, talk to us so we can work out what went wrong and adjust it for you. Or, simply log into your online account and set your Direct Debit to whatever level feels right.
If you’d rather pay for exactly what you use each month, you can switch to a variable Direct Debit. Just bear in mind that this usually means much bigger bills in winter. (Check out our full guide to variable Direct Debits).
You’re in the driving seat. We're just here to give you all the information and tools you need so debt never sneaks up on you.
Updated on
Joe Richardson
Operations Director
Published on 8th May 2022