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Understanding your Direct Debit

Posted on 11 December 2014

Direct Debit is nowadays the most accepted and trusted payment method of many. The contract will see you pay for the goods and services you use with effortless efficiency.

Your Direct Debit will be based on the estimate we gave you before you signed up. We take your annual spend and divide the amount into:

  • 12 equal payments over the year if you are paying by monthly Direct Debit.
  • 13 equal payments over the year if you are paying by four-weekly Direct Debit
  • 26 equal payments over the year if you are paying by fortnightly Direct Debit.

The benefits of Direct Debit

An advantage of paying by Direct Debit is that you always pay a fixed amount each month – allowing you to budget for the bigger bills you will accumulate through the winter when using more energy.

Your payments will be spread equally throughout the year. In the summer you may find your account in credit, but this credit will later be used to fund your larger winter bills.

Some providers often offer ‘variable Direct Debts’, however this can have a negative effect during the winter period when payments would need to be set considerably higher.

What can affect your Direct Debit amount?

A Direct Debit is payment for an expected usage. Due to this, there are a number of factors which can affect your payment amount:

  • Your future estimated usage – if your expected usage should change, your Direct Debit will be altered to accommodate this
  • Any outstanding debt or credits on your account – if your account is in credit or there is a debt on the account, it may be due to the time of year as you are paying an average amount each month, so in the summer you would expect to be in credit on your account and in the winter it may show a minus balance. However if your consumption has changed your Direct Debit will be altered to balance your account
  • Abnormal weather - if we experience a length of abnormal weather conditions, your usage will change. Your Direct Debt may be altered to accommodate this.
  • Switching tariff – if you change tariff, your unit rates may be different. Due to this, your Direct Debit will be recalculated to accommodate your new expected annual spend.
  • Estimated reads- it is important to submit regular meter reads,otherwise we estimate your usage. Left for a longer period, this can affect your Direct Debt amount. 

Direct Debit review

We regularly conduct reviews of your Direct Debit to ensure you are paying the correct amount to cover your usage.

If we discover you’re paying too much, we’ll speak with you and suggest lowering your Direct Debit, likewise if it’s discovered you’re paying too little, we’ll contact you to discuss increasing the amount you’re paying.

If you do accrue an outstanding balance on the account, we will suggest increasing your Direct Debit to both cover your usage and begin paying off the debt that has built up.

Stay up-to-date

Over the year, we’ll send you four communications to keep you informed of your Direct Debit status.

Three of these communications will be statements - The statements will give you a quarterly overview of your usage and the payments made. It will clearly outline any outstanding balance or credit on your account.

The fourth communication will be your Direct Debt anniversary/settlement. It will allow you to see how your Direct Debit has performed throughout the year.

At any-time during the year, you can contact us should you have any concerns with regards to your Direct Debit.

Direct Debits are the most simple, straightforward and secure of payment options, and correctly managed can take the effort out of budgeting for your energy spend.

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