British Gas to refund energy rebate each month.

[Whatthetrolley]

Just had an email saying that British Gas will be refunding the £67/66 per month after the full direct debit has been taken. So not just a credit on the account. I now need to up my DD to £66.

It would be very easy for the goverment to insist the money is deducted from the DD each month. As it’s the easy option, I expect the government won’t intervene as they want us all to be scared and worried.

Feels risky. I wanted the money to sit as a credit in my energy account to be absorbed as and when my bills go up.
I know we have a responsibility to manage our own money but I’m worried that by receiving the money back it’ll get eaten up elsewhere and I still won’t be able to afford my energy bills.

I can actually sort of see a logic here - bearing in mind a LOT of people have no idea what’s going on with their energy bills, why their direct debit is the price is it, and how the whole energy payment thing actually works. A lot of people still think that the DD quote a company gives you is like some sort of all-you-can-eat offer and are surprised to find that it’s not! Others think the price cap is a fixed figure and they can’t be charged more than that and so on.

So companies who take it from direct debits run a very real risk of being absolutely deluged with furious customers after the 6 months who will be outrages, fumming and so on that the energy companies have just “put their direct debit up £66 without telling me”. It doesn’t matter how clear they make it beforehand, lots of people never read anything from their supplier anyway. At least refunding it means the direct debit stays in some way consistent (apart from going up massively due to higher prices).

I’ve had the email from BG and it’s perfectly clear and easy to understand , I can’t imagine why anybody would assume that the govt would give everyone £400 to spend as you wish , it’s for using on energy . I don’t know why the OP has said she needs to increase her DD to £66 as if her dd is lower then they will refund the dd amount and credit what is left out of the £66 on to her account .

I don’t know why the OP has said she needs to increase her DD to £66 as if her dd is lower then they will refund the dd amount and credit what is left out of the £66 on to her account .

They are refunding the whole £66 to the bill payer. OP is correct she will need to pay the £66 just to get it back. It's a really backwards method of helping

I was really chuffed. It makes sense to me.

You carry on your direct debit as normal so you don't change this as an outgoing (as pp said above you then get a shock after 6 months if it went up 66 quid!) This is helpful for budgetting.

What BG IS doing is basically the vehicle for the gov to pay 6quid ish a month directly into your bank account. So it can be spent as you choose, or saved.

Genuinely makes complete sense to me!

@mattressspring but if your dd is £50 they refund you £50 and then add the remaining £16 to your energy account to use whenever it’s not like you lose that £16 .

I really don't think that is going to be an issue. Who is paying less than £66 a month for electric?

The other issue with taking it directly from the direct debit is that it gives the impression that the government is subsidising the cost of the energy - which isn’t the case, they are subsidising your bill. This might seem an obscure point but it is important to understand.

I'm paying less than £66 for electric!

I think the suppliers are damned if they do damned if they don't. Initially I thought it would be I'd pay my direct debit and the credit would be added on top. Many people have said they want to save it, but nobody thought that would be an option as we weren't getting the money in cash. I now have the option to pay it off my gas bill which will be the bigger bill of the 2 over winter.

And @SunflowerDuck makes a good point. If DD gets reduced then come April, when bills could be going up again, there will be outcry about taking too much.

One question I have, my DD gets taken on the 28th of the month, so in my head August pays for September, September for October and so on, but I'm guessing you have to pay money in the month so I'm not going to get my 1st refund possibly til November??

@Whatthetrolley

"I think the suppliers are damned if they do damned if they don't. "

Ironic given you started a post moaning about what they are doing 😂

How was I moaning? I was stating a fact based on an email I had received

It's not saying you need to increase your direct debit, but if you pay less than £67 a month the balance will be added as credit to your account. After the 6 months is over this credit will help lower the ongoing monthly bill. Seems perfectly reasonable to me and a way of spreading the cost.

@Whatthetrolley

"So not just a credit on the account. I now need to up my DD to £66."

Sounds like a moan about needing to change your DD to me.

Nope!

@mattressspring my most recent monthly bill was £60 for both gas & electric and before you say "but it's summer" I checked back & my January bill was £75, even working from home winter 2020 my bill was around £95 a month Nov-Feb.

Not everyone has the heating on full pelt & runs a tumble dryer 24/7.

@Whatthetrolley

If you say so 😂

If you're on the price cap tariff, you have a 54% and then another 100%? increase in that amount to factor in from October, making your £75 for January 22 into £231 in January 23 before the £66 discount, so no need to worry about your direct debit being less than the £66.

Does anyone know how this works if you have gas and electric (or in my case, heat and electric) with different supplies? How do you know which supplier gives you the credit? Could, for example, they make a mistake and you get the credit on each of your bills..?!

winter 2020 my bill was around £95 a month Nov-Feb

Winter 2020, my bill was around £145 for each of those 3 months.

Winter 2022 will be around £620 per month if the recenlty announced price rises go ahead. Just over a 4 x increase. An that's including dropping energy usage by about 15-20%.

Not trying to be argumentative, just trying to illustrate how big an increase we are all looking at, unless they've got an early and very lucky fixed rate to carry them through.

I edit DD amounts for my job. I imagine they are doing it this way because amending everyone's DD amounts would be a massive hassle (depending on which system they are using) so it's simpler to just reverse payments below £67 and refund £67 for those over it.
I don't think it's a trick.
This will be costing the energy companies in admin time (not that I feel very sorry for them just to be clear)

Lots of typos there - mainly because everytime I look at the costs to come, I get all angry and dizzy

It is going onto electric accounts as practically everyone has electric, it doesn't go on gas account as some don't have gas so it will be your electric supplier that it comes from

Ah ok, I guess that makes sense..but how do you know this ha!? I can't see that it's been made clear anywhere online..!

Unless you're still on a fixed tariff from a year or so ago then I think you are going to get a very nasty shock this winter.