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Energy Supplier Increased My Direct Debit Payments

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There are various ways to pay your energy bills, but many people opt to spread the cost with direct debit payments. This is a great way to avoid large demands for lump sums every few months and to budget accurately for your outgoings. 

However, things don’t always go as smoothly as you might expect, particularly when your energy supplier decides to suddenly hike up your payments. If you’ve been budgeting for a fixed amount, a sharp increase can come as a huge shock. 

Here at Home Logic, we look at the full facts of the situation and address the issue of “My energy supplier increased my direct debit payments”.

How the Direct Debit Plans Works: An Overview

In case you’re not familiar with the direct debit payment plan, it’s worth pausing for a moment just to run through exactly how it works. 

At the start of the period, your energy supplier will estimate what your usage is likely to be. This will be based on a number of factors, including past consumption if this information is available. The average household in the UK uses around 4,648 kWh of electricity every year.

This estimate allows the supplier to make an accurate estimate about how much energy you’ll use in a year. Some seasons you will use more while in others, your energy use is likely to be lighter. The monthly payment is set to take these fluctuations into account. 

What this means in practice is that you’ll pay the same amount in the summer for your energy as you will in the winter. You won’t need to dig deep to pay huge bills when it’s cold because the cost will have been spread evenly across the whole year. 

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Once you’ve paid off the excess balance, your direct debit payments should reduce to the new level calculated to keep pace with your consumption. This will still be more than you were paying originally

Why Do Suppliers Increase the Payment?

Your account will be reviewed periodically to check that you’re making the right level of payments. This will show whether you’re racking up arrears or if, on balance, you’re managing to clear what you owe. 

If the review reveals that you’re not paying enough, your direct debit will be increased to a level that covers your bills. However, in many cases there will also be an outstanding balance which also needs to be cleared. This means that the increase in payment can be fairly substantial. 

What Does the Regulator Say About This?

OFGEM is the energy regulator for the UK and the body responsible for monitoring the conduct of the energy suppliers. 

Under their terms, it’s entirely permissible for an energy supplier to increase the monthly direct debit. However, they must give you a minimum of 10 days’ notice and it should only be to cover a shortfall. 

If this applies to you, the supplier should provide you with an explanation as to what’s happened when they write to advise you of the increase. 

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When you’re comparing rates for the different energy suppliers, check to see how many times per year they review your account. Ideally you won’t want to switch to anyone who reviews your payment plan more frequently than once per year

How to Avoid It Happening Again

One of the most important factors in this is to ensure that you don’t accidentally fall into arrears with your energy company. By making sure that your monthly payments are enough, you should be able to avoid sudden increases in your monthly direct debit. 

However, if you are switching suppliers, it’s useful to look out for more than simply the cost. Many people just look for the cheapest rates, but this can be deceiving. 

When you’re comparing rates for the different energy suppliers, check to see how many times per year they review your account. Ideally you won’t want to switch to anyone who reviews your payment plan more frequently than once per year. 

This is because over the course of a year your energy use may fluctuate but over time, if you’re paying the right amount it should even out. If your account is reviewed too many times in a year, if the review occurs during a period of heavy use, it may look as if you’re not paying enough. 

This means that if you have an energy supplier who reviews your payments more frequently, you’re far more likely to have to put up with a hike in your direct debit plan. 

Be Smart About Your Energy

There are lots of ways you can save on your energy costs without having to compromise on your usage. By switching to smart devices and considering alternative energy, you could save lots of money on your bills. 

Give Home Logic a call today to find out more about what’s available and how it could benefit you on 0800 1700 636. Alternatively, simply click the button below to get the ball rolling today!