I have a fixed tariff, why has my direct debit changed?

Agreeing to a fixed gas and electricity tariff, can be really beneficial and can protect you from price hikes that may occur in the wholesale energy market. 

A fixed tariff locks your unit price and standing charge, which means they will remain the same until your contract ends. Your contract will be for a specified period, typically this is for a minimum of 12 months, and the contract is with the account holder, at the specified property.  

It is important to note when selecting a fixed price energy contract, it does not mean you will be paying the same amount for your energy bill each month. Your energy unit rates remain the same, so if you are on a fixed tariff and you use more energy one month than another, the bills you will receive will differ accordingly. However, the rate you pay for each unit of energy will be frozen for the duration of your contract.

Some customers do get a bit confused when their direct debit has been amended, and from time to time we are asked ‘why has my direct debit changed when I am on a fixed term contract?’

So why has your direct debit changed?

First things first, the price you're charged for your energy (the unit rate and standing charge) and the amount you pay every month aren't the same thing. 

If we have notified you that your direct debit is increasing, this relates to your energy usage and not a change in your tariff offering. 

When you pay by monthly direct debit, we estimate your annual usage (otherwise known as your energy consumption) and spread it over 12 months. This is typically based on the historical usage of the property. 

What you will find is, in summer you should build up a credit balance on your account as you would typically use less energy. This credit will help to cushion the increased energy usage over the winter period.

It’s important to note that we may increase or decrease your monthly Direct Debit payments to reflect a change in the amount of energy you're using.

There are many reasons why your energy use might change, and this can depend on a number of factors. Here are a few examples:

  • If you haven’t lived in the property for long, we may not familiar with your usage patterns.
  • If there has been a change to the number of residents at the property, has someone moved in/out. Or if you have had family or friends staying for a substantial period.
  • If it’s been a really cold winter or hot summer, which has meant your heating has been on for longer or have you reached for the fan to cool you down.
  • A change in your home, have you got new appliances or do you have faulty appliance/s.
  • We hadn’t been receiving meter readings and we had over or underestimated your usage.
  • You have been working from home, where previously this was not your usual work environment.
  • You’ve had or are having building work/repairs at your home.

These factors, are only some of the factors that can affect your energy usage, and as a result we may need to amend your direct debit; this can be an increase or a reduction, depending on your usage.

How often do we review direct debits?

We typically review direct debits every 3 months, and the best way for us to get a truer picture of your usage is to provide monthly meter readings. 

How much credit should you expect to build up?

We recommend, over the summer to retain at least two months worth of payments. Asking for a refund of the credit will likely mean that as we enter into the winter months we will need to increase your monthly payments to account for the increased usage.

What happens when your contract ends?

Once your contract ends, don’t worry, we will still supply your energy, it just means that the fixed tariff rate has now ended. We will always write to you (normally via email) and give you a heads up that your contract is coming to an end and what to do next.

What happens to your contract if you move out?

If you move out, the new tenant will be responsible for agreeing to a new tariff /  contract. We can also supply your new home, please let us know if you would like to take us with you and we will be able to give you a quote for a new tariff / contract.

Was this article helpful?
1 out of 4 found this helpful

Comments

0 comments

Please sign in to leave a comment.