Does this energy fix seem cheap?

[TheSmallestOneWasMadeline]

Currently pay for our gas and electricity usage every quarter. We just paid £270 for the summer months (double what we paid for same period last year).

We have just been informed that they wish to move us to a monthly direct debit of £120. This takes us to a quarterly figure of £360 which doesn't seem like the massive increase I was expecting taking into account annualised usage.

For context we are 2 adults and 1 toddler.Guessing average usage
I WFH 4 days a week and have done for years so its already reflected in our average annual consumption. We watch a bit of TV in the evenings, cook every night, use appliances etc.

House is 3 bed detached and pretty poorly insulated so we do have the heating on a lot from Nov onwards.

Does this seem cheap?

It isn't a fixed monthly direct debit and it can go up or down depending on your usage.

Are you on the standard variable rate which is pretty much the same for every energy company as they are covered by the price guarantee prices? (around 34p/kwh electricity and 10.3p/kwh gas)

What are your tariff rates? How much did you use over the last year? Without those details Jo one can say whether it's cheap or not.

It depends on your annual usage in kwh (should be an estimate on your bills) and the price per kwh and standing charge as to whether the direct debit amount is a fair price.

Bear in mine £120 is not a fixed amount and can be changed up and down. If you're on the price guarantee rates its only the price per kwh and standing charges that are fixed so if you use more you pay more.

What’s the name of the tariff? Unlikely to be fixed. Paying by monthly direct debit doesn’t mean it’s fixed.

It’s not £120 for your total usage per month. You could use more. That’s just a direct debit quote to pay towards the bill each month.

You need to look at the actual unit rates what you are paying now vs the ‘fix’ what you are being offered and also the price cap rates

You need to look at the tariff. What you are asking is the same as "is £50 of petrol a lot?" It depends how much you petrol you get!

What everyone else said.

Plus the £120 could be after the £400 winter government help, so it could be that amount for 6 months, then increase to £187 from next April. Plus any necessary adjustment if your usage varies from what they've assumed.

And how far you drive.

No-one would say I've just bought £50 of petrol, is this enough to last me the month without thinking about how far they drive, what sort of car they have and what the price per litre was, so it's quite strange that so many people effectively ask the same question about their utility bills.

We are just on the standard variable rate, no fix.

So basically we are just going to be paying for whatever we use monthly rather than quarterly? That's fine if that's what it is, I thought the monthly DD arrangement was where you pay the same each month and then you have credit in the summer to go towards winter when Bill's are higher. No idea where I got that from then!

I thought the monthly DD arrangement was where you pay the same each month and then you have credit in the summer to go towards winter when Bill's are higher.

that is how it works, yes. If the energy company see that your direct debit isn’t enough or us too much for the amounts you’re using so that it won’t all even put by the end of the year, they adjust your direct debit up or down accordingly.

Btw have you accounted for the £400 government help in your annual calculation? If the energy company have already factored this into your monthly direct debit, that might explain why the figure is lower than you thought it would be?

You need to look at your account/emails from your energy company. No-one here can say for certain what's been agreed by you and your energy company.

The most common way is to pay in equal monthly instalments (which will be £66 less for the next 6 months), but some providers allow people to pay each monthly bill as it comes.

However, that's less popular because your winter bills are usually much higher than the summer ones, and most people find it easier to budget the same each month. But seeing as you're used to paying quarterly, you won't have that issue.

We have just been informed that they wish to move us to a monthly direct debit

Do YOU want to do this?
Is it at better unit and standing charge rates than you are currently getting?

You don't have to change your payment method just because the supplier wants you to, but the rates might make it worthwhile.

But if they're quoting an amount, that suggests equal monthly direct debits, because otherwise, they wouldn't give you an amount, but bill you at the end of each month, sending a statement charging you for X units of electricity and Y of gas, plus a month's worth of daily standing charges, that will be taken a few weeks after the bill is issued, a bit like a how a credit card statement works.

That's true, but you wouldn't let tesco estimate your trolley value and blindly pay it each week. For example, Octopus pulled a figure of over £300 pm out of the air when I moved into this house. I use between £120-230 per month summer-winter. Your usage might be higher or lower than the estimate (dd), but it's worth spending some time to work it out.