Variable Direct Debit

  • SirDanceALot's Avatar
    Level 1
    I currently pay by fixed DD - the forecast my account is showing is ridiculously high - how do I change to monthly billing and variable DD (so basically pay as you go) and in doing so will there be any negatives attached i.e. lose discount etc.
  • 30 Replies

  • Best Answer

    Anasa_EONNext's Avatar
    Community Co-ordinator
    Best Answer
    Hi @SirDanceALot Anasa here 👋 I'm sorry to hear that you think your Direct Debit is a bit too high.

    We can have a look into this for you and if you'd like to cancel your Direct Debit we can do that at the same time, some tariffs have a requirement of a Direct Debit so you might not want to cancel if it means changing your plan but if you do decide to cancel we'll be able to find you another one. Don't worry there is no charge for a tariff change it just means if you have to change plans you may not be on the same rates you were before.😊
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  • Landmark's Avatar
    Level 28
    What a wonderful proposition Variable Direct Debit is as opposed to Fixed Direct Debit. It would makes more sense I think, because it would avoid any outstanding credit from building up causing customers to be somewhat out of pocket in these hard times! It's worth taking the time to look into this further; for further news and updates on my experience, watch this space.

    Eon Next Customer

  • Andy65's Avatar
    Level 32
    Quote Originally Posted by Landmark View Post
    What a wonderful proposition Variable Direct Debit is as opposed to Fixed Direct Debit. It would makes more sense I think, because it would avoid any outstanding credit from building up causing customers to be somewhat out of pocket in these hard times! It's worth taking the time to look into this further; for further news and updates on my experience, watch this space.

    Years ago when the vast majority were paid weekly in cash, they knew how to budget especially for gas and electric which were billed quarterly. Fixed DD effectively does that and I suspect that many now rely on it and can't budget in the same way that we used to.

    I would say the opposite to you actually, fixed DD is far more beneficial now in than variable DD. Yes some people will be in credit and could do with that money, but as winter approaches that credit will be quickly used up but their monthly payment shouldn't change too much. If they switch to variable DD and the winter is anything other than mild, they'll face some hefty bills every month far in excess than their usual monthly payment.

    It's just my opinion but I think a lot of people don't know how to budget these days so switching to variable DD will get them into a worse situation, not true for everyone but most I suspect.
  • Landmark's Avatar
    Level 28
    Quote Originally Posted by Andy65 View Post
    Years ago when the vast majority were paid weekly in cash, they knew how to budget especially for gas and electric which were billed quarterly.
    Actually that isn't relevant in this case because the billing is monthly, and thus so would be the variable direct debit
    Quote Originally Posted by Andy65 View Post
    Fixed DD effectively does that and I suspect that many now rely on it and can't budget in the same way that we used to.
    Variable that matches bills monthly equates with most peoples wage payments and could be easily and flexibly fine tuned for the Direct Debit payments to come out of ones account after payday thus no need to manually budget these outgoings.
    Quote Originally Posted by Andy65 View Post

    I would say the opposite to you actually, fixed DD is far more beneficial now in than variable DD.
    Have you heard that energy companies are proposing to increase most peoples Direct Debit amounts the month before the 80% increase in the price cap? Now let's take a reality check and realise that may not be benefitial after all given that there is no guarantee that the increases would be fair, given that it is common practice for energy companies to profit by erring on the side of increasing Direct Debits too much rather than too little as in my experience
    Quote Originally Posted by Andy65 View Post
    Yes some people will be in credit and could do with that money, but as winter approaches that credit will be quickly used up but their monthly payment shouldn't change too much. If they switch to variable DD and the winter is anything other than mild, they'll face some hefty bills every month far in excess than their usual monthly payment.
    That will happen anyway if the energy company increases their fixed amount; just that the nasty surprises come sooner rather than later
    Quote Originally Posted by Andy65 View Post

    It's just my opinion but I think a lot of people don't know how to budget these days so switching to variable DD will get them into a worse situation, not true for everyone but most I suspect.
    I see your point that the energy could save some of the customers' money for a rainy day for them (in the Winter), but that is their money earning the energy companies interest when it seems to me the correct place for it would to be always in the customer's bank or pocket where they may need it for something urgent
  • JoeSoap's Avatar
    Level 33
    Whether your DD is fixed or variable, the cost of your usage will be the same over the year.

    I consider myself good at budgeting but if I had a variable DD then in the summer months I would have to put aside the difference of what the fixed DD would have been and what the actual DD is so that in the winter I would have the money available to pay the enormous DDs that would be taken.

    I know many people who cannot budget so well and would have an enjoyable summer whilst not foreseeing disaster in the winter.

    The only benefit to a variable DD I can see is the tiny amount of interest (certainly at today’s rates) you would earn in the summer and to me that would not be worth the hassle.

    Personally, I feel comfortable going into the winter with a good credit balance on my account. We all have different views and are in different circumstances but for me it’s Fixed Monthly DD all the way.
  • meldrewreborn's Avatar
    Level 53
    @JoeSoap

    We see lots of “my DD is going up and I can’t afford it “ posts here. The reassessment of the DD, which looks forward is giving the customer a timely warning of problems ahead that is personal rather than the generic warnings in the media. So for most people a fixed DD, if accurately assessed is preferable.
    But I’ve gone the variable method sometimes when the suppler didn’t seem able to compute the fixed DD properly. I foresee a lot of customers getting into arrears with their energy accounts this winter and the usual response by the supplier of fitting a prepayment meter will not work because of the large numbers involved.
    Current Eon Next and EDF customer, ex Zog and Symbio. Don't think dual fuel saves money and don't like smart meters. Chronologically Gifted
  • JoeSoap's Avatar
    Level 33
    @meldrewreborn

    If the fixed DD amount is way too high due to the predicted annual usage being too high then yes, I would have an issue with that and raise it with the supplier. If the predicted usage was in the ball park then fixed DD is always best for me. If for some reason the supplier widely disagreed with my own usage estimates then I would have to reappraise.
  • Landmark's Avatar
    Level 28
    Update: ladies and gentlemen please note that although Digital Energy Specialists available for contact by Twitter PM or hi@eonnext.com can change Direct Debit from Fixed to Variable, one can ***only*** do this on a variable tariff such as Next Flex (Direct Debit Version) and ***not*** Next Online V20 (Direct Debit Version) or Next 1 Year V21 (Direct Debit Version)
  • JoeSoap's Avatar
    Level 33
    Personally, my household usage is about three times as much in winter as it is in summer. I’m financially pretty savvy, reasonably financially secure and have no mortgage or young children. I could cope with variable direct debits because I would be planning well ahead.

    When I was in my younger days, struggling with a mortgage and raising a family, I may well have been tempted by the espousing of variable direct debits during the summer months when I could have done with the extra money to see me through the month.

    Imagine my three times the usage in the winter, then imagine a harsh winter, then imagine the price cap hikes in October and January… Remember, we are talking about those on variable tariffs like Next Flex.

    The young me, at the end of January next year, getting over the Christmas bills, would likely be faced with an energy bill several times that of my bill at the end of September. It would be ruinous.

    The majority of people aren’t like us, spending time on an energy forum, and there’s big trouble ahead in my opinion as many have not got their heads around what is around the corner.

    Fixed direct debits have their faults but I would still argue that in general, they are beneficial to the majority of us, and I would be wary of recommending otherwise… particularly right now.
    I'm an Eon Next dual fuel customer with no particular expertise but have some time on my hands that I am using to try and help out a bit.