Although we still do not know the reductions to be applied under the EPG from April we do know what the OFGEM price cap figures are, and the EPG will be applied as a reduction to the unit rates derived from the OFGEM price caps. Therefore the EPG reduction cannot invalidate what follows.
In this letter:
https://www.ofgem.gov.uk/sites/defau...ril%202023.pdf
OFGEM sets out the regional price caps for Direct Debit, Prepayment and payment on receipt of bill for both electricity and gas.
As you know I often point out that payment by direct debit is the cheapest way to pay, and with E.On Next there are two versions – fixed monthly Direct Debit and Automatic payment of bills after they are raised. I’ve pointed out how this second option is £200 cheaper per year for the average dual fuel customer over payment by cash/cheque/bank transfer. I’ve also pointed out that prepayment is also more expensive than Direct Debit for the average dual fuel customer, although the differential is much lower.
There is though, a wrinkle in all this. Not all customers are dual fuel. So what is the case if you are just an electricity consumer? Well, based on the tables at the end of the letter, Prepayment comes out the cheapest way to pay, followed by Direct Debit and payment on receipt of bill is by far the most expensive. That was a bit of a surprise to me, but it reinforces the old phrase “the devil is in the detail”.
And when you look further, electricity prepayment customers pay more than direct debit customers for their standing charges, but less on their unit rates so that eventually “average" users pay less overall.
In this letter:
https://www.ofgem.gov.uk/sites/defau...ril%202023.pdf
OFGEM sets out the regional price caps for Direct Debit, Prepayment and payment on receipt of bill for both electricity and gas.
As you know I often point out that payment by direct debit is the cheapest way to pay, and with E.On Next there are two versions – fixed monthly Direct Debit and Automatic payment of bills after they are raised. I’ve pointed out how this second option is £200 cheaper per year for the average dual fuel customer over payment by cash/cheque/bank transfer. I’ve also pointed out that prepayment is also more expensive than Direct Debit for the average dual fuel customer, although the differential is much lower.
There is though, a wrinkle in all this. Not all customers are dual fuel. So what is the case if you are just an electricity consumer? Well, based on the tables at the end of the letter, Prepayment comes out the cheapest way to pay, followed by Direct Debit and payment on receipt of bill is by far the most expensive. That was a bit of a surprise to me, but it reinforces the old phrase “the devil is in the detail”.
And when you look further, electricity prepayment customers pay more than direct debit customers for their standing charges, but less on their unit rates so that eventually “average" users pay less overall.
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.
