In its announcement of the revised price cap in August2022, OFGEM stated that average customers not paying by Direct Debit, faced additional charges of £215 per annum because of the extra costs to suppliers in dealing with such customers.
Previously, I had thought (without any detailed analysis) that the EPG reduction would have brought the excess figure down to perhaps £150 per annum. But now that I’ve looked in detail, I’ve realised that the EPG reductions affect both Direct Debit tariffs and “other payment methods” tariffs equally in price terms, so that the differential between the total costs of both methods will remain the same - £215.
The average Direct Debit bill is, after the EPG is factored in now £2500, and £215 is equal to an overall price increase of 8.6%. Electricity Standing charges are 12-16% higher (its regional) and Gas standing charges are 17.72% higher (nationally) if you’re not on Direct Debit. Unit prices are around 7.5% to 8.25% higher. This means that if you use smaller amounts of energy than the average customer, the cost of not paying by DD will be greater than 8.6%, possibly a lot higher.
People should think very carefully whether they are making a sensible choice in not paying via Direct debit.
Previously, I had thought (without any detailed analysis) that the EPG reduction would have brought the excess figure down to perhaps £150 per annum. But now that I’ve looked in detail, I’ve realised that the EPG reductions affect both Direct Debit tariffs and “other payment methods” tariffs equally in price terms, so that the differential between the total costs of both methods will remain the same - £215.
The average Direct Debit bill is, after the EPG is factored in now £2500, and £215 is equal to an overall price increase of 8.6%. Electricity Standing charges are 12-16% higher (its regional) and Gas standing charges are 17.72% higher (nationally) if you’re not on Direct Debit. Unit prices are around 7.5% to 8.25% higher. This means that if you use smaller amounts of energy than the average customer, the cost of not paying by DD will be greater than 8.6%, possibly a lot higher.
People should think very carefully whether they are making a sensible choice in not paying via Direct debit.
Last edited by meldrewreborn; 05-10-22 at 11:35.
Current Eon Next customer, ex EDF, Zog and Symbio. Don't think dual fuel saves money and don't like smart meters. Chronologically Gifted. If I offend let me know by private message, but I’ll continue to express my opinions nonetheless.
