Probably a stupid question... do energy companies charge interest on debt?

[QS90]

Just that really. We were moved onto Shell when our supplier went under and they want to increase our DD, that we can't afford. We will keep paying what we already were doing (about £300 per month). Obviously we will go into debt doing this - do they charge interest on debt, and if so how much is it likely to be please (percentage / flat charges / other)?

Bump!

No, they don't - not in my experience anyway, (EON), (we just paid back a set amount after having estimated ones for so long, we'd inadvertently built up a debt - I don't know if they would charge interest if you refuse to pay it back?)

The real risk is that they might move you to a pre-payment meter.

Can you afford to ve moved to a pre payment meter...thats what you should be asking yourself

Don't think so, but they will want you to pay enough for your usage and if you don't, it will build up a debt, and then they'll want you to pay it off within a few months, by increasing the DD even more, and if you can't keep up with that, there's a risk of you having to have a prepayment meter.

You need to check what your direct debit needs to be to cover what you use - some companies are setting them too high, so it's worth being mindful of that.

However, rates have increased significantly and if you're on the standard rate it is going to be approximately double what it was a year ago, even accounting for the £400 credit.

Are you able to use less than you do now, to reduce the cost? £300 pm is above average, so there might be scope to use less and hence pay less. Have a look at Moneysaving Expert which has advice on checking your DD and and also reducing your utility usage.

Appreciate it might be hard if you're all electric, in a very old house or have someone vulnerable at home, but it might be easier long term to cut back on usage or lower temperature a bit? £300 is more than double what we'll be allowing ourselves to use.

No, they don't. I'm in debt with mine since years ago when bills became unaffordable. We now pay what we can afford, keep in touch with them, and they've advised me to look at a DRO which I may do as I have debt from a long time ago, but it also does not affect my credit rating.

Depends if the direct debit amount they are suggesting is reasonable or is higher than the amount you are using.

Are you in debit or credit?

You can change to a variable pay for what you use with shell.
Their predicted usage direct debit amounts are bonkers

Thanks all for your responses!

I actually got it a bit wrong before (having a late night panic!). We're currently paying £224, but they want to put it up to £284 (still quite high I know). We're in credit now, but they say we will go into debt if we don't pay more? We have an old house, with a very old (1996!) boiler. Did invest in proper windows this year which I hope will make a difference (the double glazing was shot on the last lot). We have been using the heating more the last couple of years, as have a toddler now of almost two. Have held out on putting on heating so far this year, although the toddler keeps waking up because he's cold about 1am and insisting on coming in the big bed. Reluctant to pile loads of blankets or an electric blanket on him because of the SIDS risk 😕Washer and drier are on a lot, but it's difficult because everything gets gunked up with paint and yogurt and poo so frequently. Not sure what we'll do come the new year, as have a new baby due then! Pray for a mild winter I suppose! Perhaps he'll grow into one of these hardy people who can walk around it shorts all winter when he's older?

@spaceshiptrain that's a relief to hear about the interest, specifically. We are still paying what we can too, so hopefully they will class us in the same boat.

@emark That's really interesting to know. Will look in to this, as I strongly suspect they are collecting more, and profiting on the interest (as if they don't take enough money as it is!). I presume the estimated rates are based on our past usage, before the rates went up eg) last year? Which won't be right as most people are using a lot less.