Another electricity one. Sse is going to tell the bank to increase my direct debit to £400.00 a month.

[coodawoodashooda]

Do I cancel the direct debit? Is there a penalty for not paying by direct debit. I can't possibly afford that.

Dont cancel it whatever you do, they may enforce penalties like a different rate or even make you have a pre payment thing which is very expensive

You dont have to agree to a certain DD cost but you need to negotiate with them, dont just cancel it

Call them and tell them you can’t afford it. The call centre person will say how you risk going into debt. Acknowledge this and tell them an amount you can afford.

I did it last year when they wanted to triple my dd despite me being in credit

They've written that they'll tell the bank. That's what scared me the most.

I don't know how it works with DDs. I just want to pay what I owe each month, same as I do with my phone bill. I think the argument of 'Building credit so you can budget' is bollocks. They ALWAYS want to take more than they need (by about 20% in my experience) even when you have actual usage data.

Octopus wanted to put my DD up to some stupid amount. I said no. So they didn't. I still built two month's credit over the summer. Obviously that won't be sufficient for the winter, but how I budget for that is MY problem to choose how to solve, not theirs to dictate in advance.

But that’s to inform the bank of the new amount. If you phone and agree another amount they’ll tell the bank that new amount instead

As someone upthread has said, you can just cancel your direct debit and pay for what you use at the end of the month. That’s what I now do, as do many others. The companies are basing the estimations on your previous usage, but lots of people are now scaling right back on their usage to bring their bills down, so their estimates of your future usage could be way off the mark. As long as you pay for what you use, they cannot make you pay more. They don’t like you doing it - my energy company call me every month to try to get me back on direct debit, but I just refuse. Nothing they can do about it.

You can have a variable direct debit which means the utility company will take only the amount owed and only when it’s due. I’m with SSE and their default is to set the account up with a fixed direct debit amount which is always, as others have said, much higher than the actual usage.Which they bank in their coffers and gain interest on. You can just ring them up and tell them you want to be put on a variable direct debit, or tell the amount you want to pay. I’ve always just paid what’s due when it’s due but I know some rely ont the build up of credit over the summer months to lessen the impact of winter costs.

Check before doing this. Some electricity companies charge a higher rate for non-DD payment. A higher standing charge too.

Ask for a variable DD if that option is available.

Hi OP,

If you want to cancel your DD, you are free to do this. There is no penalty. If you are on the standard tariff, you may find when you cancel your DD the daily standing charge goes up by a few pence. The reason for this is many energy suppliers will knock a few pence off the daily standing charge as a thank you for paying by DD, as it lowers their admin costs.

Think of it like a paper bill charge, if you will.

If you want to pay on receipt of bill, you can normally choose between monthly or quarterly. You also can give a meter read after a bill is issued if you forget to do so beforehand. Don't think you have to pay an estimated bill just because one is issued. They will issue a new bill if you give them a meter read. This will also generate a new payment date, as they have to give at least 14 days after the bill is issued for payment. Some people take advantage of this if they need to extend a payment, they will wait for an estimated bill and then call up with a meter read to get extra time before payment is due, avoiding any late payment fees.

If you are going to cancel you DD, please make sure to do this with the bank by phone, online or in-branch.

I've never had a direct debit been too much. We've almost always been in debt to the energy company, often by hundreds of pounds.

OP, what is your projected annual cost and do you have any debt on your account? Are you on a fixed or variable tariff and how many units do you use?

Are you planning to use a lot less in the coming winter?

There seems to be an awful lot of people saying they'll pay what they owe on variable direct debit, which seems quite a risky strategy at the end of summer when bills are lowest.

Those bills 'paying for what you owe' early next year need to incorporate a doubling in the unit rate if you're on the price cap and much higher winter usage.

If your annual predicted use is £4k your bills for December to March could be £6/7/800 a month.

I predict a lot of complaints about this early next year from people who just don't realise this.

You'll have to give the energy company a ring and ask them to take less.

Yup agree. When the unit prices go up more it will only get worse.

You really need to look at your usage in KWH and see what you think it will be under the new rates.

Identify what devices are using a lot of energy - and see if you can make some lifestyle changes.

Reducing the DD will not reduce the overall bill - so make sure you understand where the energy is going

Ring your energy company and talk to them and agree an amount you can pay

Shell wanted me to pay 250 per month from April I think it was. I could alter this on the app though couldn’t get it below 170 and got lots of messages pointing out this was not enough. Have you got an app that gives information, or possibilities available on the website? I think if you call you will be able to negotiate if you want to stay on the DD, or change to pay your bill each month - I think that is Martin Lewis advice along calling to register a complaint if you’re worried you can’t afford the bills.
I didn’t choose Shell, got them when my previous one went bust, and I am in some credit now. My usage last year was higher than it has been since April, but guess they can only go on last year’s. Also understand that they like cash in their bank to get energy at good rates, though not sure how this works when we don’t store it in the U.K.
These are ridiculous prices and I expect mine, and everyone’s will be looking at similar rises - so this thread will be useful. Though maybe Sept 5 will change things - maybe!

Thank you everyone

I change my ScottishPower DD amount on the app because what they choose to charge me is always far more than I use and leaves me in a lot of credit.

Oh...so I'm not the only one who was asked to increase despite being in credit. This happened to me in March. I still can't figure out what the hell that was for.

I tried that, but they will only let you reduce it to a point that you are no more than £100 in debt based on their estimated usage.

They are charging me £350 at the moment, despite me using less than £200 and are refusing to lower it any more.

I have explained til I am blue in the face that our energy usage last year was artificially high and it is a lot less now, but they aren't budging.

I'm currently over £400 in credit too...

If you want to cancel your DD, you are free to do this. There is no penalty. If you are on the standard tariff, you may find when you cancel your DD the daily standing charge goes up by a few pence. The reason for this is many energy suppliers will knock a few pence off the daily standing charge as a thank you for paying by DD, as it lowers their admin costs.

This is incorrect.

If you pay on receipt of a bill instead of by direct debit the unit cost will go up, not just the standing charge.

www.mirror.co.uk/money/martin-lewis-warns-against-cancelling-27848340

i keep trying to reduce and will keep doing so

EDF wanted to double my DD payment after our tariff changed. Would have been fair enough if they hadn’t just issued us a £350 refund because our actual usage and their estimated usage are wildly different.

In reality we are only now using in £ what we were paying before our tariff increased. Obviously this is summer so it will go up later in the year. I agreed a cursory £20 increase to my direct debit and am monitoring the smart metre and will make changes in autumn/winter as necessary but I want to the impact of the £66.

I basically told them what pp have said, I am a grown up and perfectly capable of managing my own payments thank you. They give you the waffle and not advising that you pay less - this is because they want to steal the interest on your money. Don’t let them. Tell them what you can afford to pay and what is reasonable based on actual usage, or simply pay whenever your bill arrives.

Here's the Which? calculator if you want to compare it with what your energy company is suggesting:

www.which.co.uk/news/article/energy-price-cap-rises-to-3549-how-will-it-affect-your-bills-aZkHR2p2t2P7

This is all pretty scary. I imagine there will be a lot of people like the OP moving to variable DD because they simply can't afford four hundred pounds, and then building up an eye watering amount of debt at eight hundred pounds per month over the winter. Unless Truss and Kwarteng intervene radically in September they'll have no choice but to nationalise the suppliers by Spring because they'll all be bust.