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Variable or fixed direct debit?

2 replies

NewMum2021x · 07/04/2021 00:08

Is variable direct debit of fixed better for electricity? And why?😂no idea what to go with!!!

OP posts:
Scbchl · 07/04/2021 00:16

Do you mean a fixed or variable deal? Fixed means you know what you will be paying every month. If the price per kwh shoots up, your payment will remain the same. However the benefit of variable is that if the price drops down, your pay less.

BarbaraofSeville · 07/04/2021 09:29

Yes, check whether it's the price per unit that's variable, or the direct debit amount.

Price per unit, you take the risk of price rises or they could go down, no idea how likely this is.

Variable direct debit means that you pay for what you use as you go along, instead of averaging over the year. If you're heating with electricity, the cost in winter can be considerably higher than in summer so you need to have slack in your budget to cope with this. Otherwise, you might struggle with higher winter bills at the same times as the extra cost of Christmas, for example.

If you're setting up an account now, it's probably best to go with a fixed direct debit, because they'll estimate what you use over the whole year, and you'll build a credit over the summer towards higher winter bills so will have already covered a lot of the cost.

Or you could choose to make your supplier wait to be paid for your energy until you actually use it, and pay the smaller summer bills and the cope with higher winter bills when they arise.

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