[SteveK]

Dear E.ON Next,

Where does all the interest earned from customers money go?

I was lucky enough to have a savings account that was earning me £50 interest every month. I’m in credit by £300 with E.ON Next and understand it will take between 7 and 14 days for an electronic return of my money. It will take between 14 and 28 days for a cheque to be sent..

How many private residential customers do you have?
What is the collective balance of credit across all those customers you have?
How much interest did their money earn in 23/24 tax year?
Lastly, if there was any interest earned, where did that money go?

Best wishes,
Steve

[Mailman]

Originally Posted by SteveK

Dear E.ON Next,

Where does all the interest earned from customers money go?

I was lucky enough to have a savings account that was earning me £50 interest every month. I’m in credit by £300 with E.ON Next and understand it will take between 7 and 14 days for an electronic return of my money. It will take between 14 and 28 days for a cheque to be sent..

How many private residential customers do you have?
What is the collective balance of credit across all those customers you have?
How much interest did their money earn in 23/24 tax year?
Lastly, if there was any interest earned, where did that money go?

Best wishes,
Steve

As someone who has a debit balance on my account due to paying by Variable DD (this means I actually have a debit balance for approx 17 days out of every month) another question you might also want to tag onto your original post is:

What is the collective balance of debit across all those customers you have?

Does Eon Next ring-fence all DD payments into a separate account rather than just one large corporate cash-flow transactions account? I have no idea for this one.

My various bank accounts earn 0%, 2%, 4% and 7% depending on the access etc. I think there is some merit to having say a 1-2% nominal interest on credit balances (matching an instant access saver bank account) although you then get into a sticky wicket of what to do about those customers with debit balances (be they regular or irregular). An energy supplier is not a bank although we might think that they treat funds as if they were.

TBH, I find VDD works around this problem in an efficient way with the least inconvenience to myself. Any surplus funds I have get stuffed into the appropriate account initially thus maximising the interest on my income and minimising the interest earned by the supplier.

[geoffers]

Originally Posted by Mailman

Does Eon Next ring-fence all DD payments into a separate account rather than just one large corporate cash-flow transactions account? I have no idea for this one.

I think in the regulated finance industry clients' money is retained in a Client Money Account (CMA) rather than going onto general corporate finance, but whether this applies to all other business accounting I don't know.

[SteveK]

Thanks for your responses!

Maybe I e used the wrong terminology.. not sure.. I am making the point that I am in credit by £300 and therefore E.ON Next has £300 of my money beyond my service use. As there statement says ‘£300CR’ so I’ve used that same reference.

I must be honest I’m a little bit lost with all the percentages and acronyms. My basic question is where does the interest go that is earned on customers money? They keep the money in a bank account so does that earn E.ON Next interest?

[SteveK]

Originally Posted by Mailman

As someone who has a debit balance on my account due to paying by Variable DD (this means I actually have a debit balance for approx 17 days out of every month) another question you might also want to tag onto your original post is:

What is the collective balance of debit across all those customers you have?

Does Eon Next ring-fence all DD payments into a separate account rather than just one large corporate cash-flow transactions account? I have no idea for this one.

My various bank accounts earn 0%, 2%, 4% and 7% depending on the access etc. I think there is some merit to having say a 1-2% nominal interest on credit balances (matching an instant access saver bank account) although you then get into a sticky wicket of what to do about those customers with debit balances (be they regular or irregular). An energy supplier is not a bank although we might think that they treat funds as if they were.

TBH, I find VDD works around this problem in an efficient way with the least inconvenience to myself. Any surplus funds I have get stuffed into the appropriate account initially thus maximising the interest on my income and minimising the interest earned by the supplier.

In short, you don’t know where the interest (if any) goes?

[meldrewreborn]

@Mailman

in practice you are always using the supplier’s credit, because even when you pay the latest bill, you are already half a month into the next.

[Mailman]

Originally Posted by SteveK

In short, you don’t know where the interest (if any) goes?

That's about the size of it from a fellow consumer.🍺

[Mailman]

Originally Posted by meldrewreborn

@Mailman

in practice you are always using the supplier’s credit, because even when you pay the latest bill, you are already half a month into the next.

Indeed which is why my account is currently showing a Debit (DR) balance for 17 days each month as per

until the payment of £97.84 is taken by VDD (circa 17th Nov) leading to a £0 balance for the remainder until the next statement is raised on 1st Dec. 🥂

[meldrewreborn]

@SteveK

the credit balances provide working capital to the supplier. It was a factor in the plethora of challenger companies that existed before the energy crisis going bust , because they had insufficient non customer capital to weather the storm. Rules are different now - suppliers have to be better capitalised, but they still benefit from customer balances. If direct debits were set fairly, the accumulated total would be close to zero, but of course the accumulated total is a massive credit.

[wizzo227]

I suspect that the more "fixed" your electricity price p/kWh is, the more "future agreements" with "the wholesale market" got made, and some of those protected you from having to pay 80+ p/kWh during yesterdays' dreary weather and after-school electricity usage peak time. So the money left in advance with EoN from biller accounts in credit may have previously left EoN and gone to some hedge funds and other "price insurance fixers", and it is they, not the bill writer desk at EoN, who sit on billions of somebody else's money and speculate with it. Yesterday, they'd have had to buy at spot anything which they hadn't previously paid for. They might even have profited from rival trader funds, if their renewables forecasts were better than the other lot. It is their cowardice which bumps up the price of renewables on better days from (not very much) paid to renewable generators, up to the gas marginal price at the time when the last electricity trader settles. So apart from the leftovers off a few of the big power stations in the Ruhr, EoN don't really supply your electricity. They take your money, give it to a wide scatter of electricity speculator desks, and send you the bill, not necessarily in that order.