Monthly direct debit for gas and electricity

[ANEC]

I’ve received an email from Octopus Energy saying my new monthly d/d will be £283, up by about £20 a month. Apparently this is to keep on track for the winter months. I’m already £430 in credit.

As I’ve no idea when I set up the latest tariff I looked to see what they’re offering. 3 tariffs with a difference of about £28 between them. The scariest thing was they think I’ll use between £3100-£3450 worth of gas and electricity over the next 12 months!!
I’m absolutely gob-smacked. I live in a 3 bed bungalow with my hubby, who works away and only comes home every 3 weeks for a week. So for the majority of the year it’s me, myself and I. Only 1 bedroom is used, the other 2 are in the attic and due to the insulation we’ve never had the heating on, ever. I hate lights and switches being left on. I’m quite happy sitting with a night light on. I do regular meter readings. 1 load of washing a week.

I’ve spoken to clients and friends and they seem to be paying less a month than me with bigger houses and more people.

Can I ask what your monthly direct debits are? Am I being taken for a patsy?

I have the heating on most of the day in winter and when it drops below 19°
my DD is less than £200 for a 3 bed semi with 2 kids and me

Look at your actual bills. We are with Octopus and prior to putting in solar panels we were paying £220 last winter for a 4 bed detached with fairly heavy usage as we have underfloor heating. You can override what they suggest so just tell them you don’t think it should go up that much. Check last years usage.

With Octopus, 2 adults, 2 bed bungalow and pay £100 mth and have £350 credit
I just log in and change my payments as to what I think

Of course energy suppliers benefit from it.

Octopus has 8 million customers in the UK, so if all of them are just £100 in credit, that means they have £800 million in their bank account that does not yet belong to them. They aren't going to leave that much cash in the bank sitting there doing nothing. They'll be using it.

They say not, and if you think about it your post explains why, the money doesn't belong to them so if they were to use it maybe it could be seen as some sort of fraud.

Ours has just been increased from £200/month to £376/month….and I’m £75 in debit…
we run 3 electric cars so ours is quite high…

I'm an accountant. They cannot recognise money received in advance as revenue, but have to account for customers in credit as a balance sheet liability in their statutory accounts. However it does not prevent them from using the actual cash itself in the course of running their business.

It is what banks do. All the customers with money in the bank are liabilities from the bank's point of view, as they owe you the money. However, what they actually do is lend it to other people and charge them interest for borrowing it. That is a simple example of how banks and building societies make money.

You see, what you say makes sense and is pretty much what I would have thought, but they were adamant that they do make any interest off the money held in credit.

You would have been talking to someone in customer services, and no doubt that is the standard reply. What the finance bods at head office do with it is another matter altogether, and their customer services people would have no idea.

I just had a look at their statutory accounts on Companies House, and those of the parent company also. The words 'investments' and 'finance income' are present in those (long-winded) documents, and 'finance income' is accountspeak for, among other things, interest earned.