How to Reduce Your Electricity and Gas Direct Debits
By Graham Self
Has your gas and electricity supplier ever changed the amount of your Direct Debit payments? Have you felt that the new payment amounts are not reasonable but not known how to challenge them? Here we explain the ways to check what you should be paying and how to get your Direct Debit payments changed.
There are several benefits of paying for your gas and electricity by Direct Debit:
- Energy suppliers generally offer discounts if you pay by Direct Debit
- Your gas and electricity costs are spread evenly over the year
- Direct Debits can make managing your account and finances easier
How gas and electricity suppliers set your Direct Debit amount
Gas and electricity suppliers set your Direct Debit amounts based on the amount of energy that they think that you will use over a year. If you have recently switched, this will likely be an estimate, or for existing customers, the suppliers could refer to your gas and electricity consumption in previous years.
If you have built up any credit or debt against your gas or electricity account, this amount will also be considered when your energy supplier sets your Direct Debit amount.
Find out how much gas and electricity you use in a year
The first thing to do is to check how much your gas and electricity should cost you over a year. To do this, you need to find out how much energy you use. You need to find out how much you use in KiloWatt hours rather than how much you have spent as your energy prices will have more than likely changed over the course of a year.
If you have previous electricity and gas bills to hand, you can refer to these to work out how much you use over the course of a year.
If you do not have previous bills to hand, you can find out how much you gas and electricity you use by taking regular meter readings. You can then use these to estimate how much gas and electricity you use over a year. For example, if aver the space of a month, your meter readings showed that you used 300KWH of electricity in a month, you could multiply this figure by 12 to give an estimate of a year's use. However, you need to consider that usage in winter months is often higher than during summer months.
Check how much you should be paying for your gas and electricity
Once you know how much gas and electricity you use in a year, you can put these figures into the UKPower gas and electricity price comparison engine to see how much your current tariff would cost based on your annual usage.
First enter your postcode and then on the current supplier details page, select your current energy supplier and gas and electricity tariffs. You then need to choose to enter your gas and electricity consumption by usage and enter your annual usage amounts.
On the results page, find the tariff that you are currently on. If you are not on a dual fuel tariff, click on the gas or electricity tabs at the top of the results page to view individual gas or electricity only results.
When you find your current energy tariff in the results, make a note of the annual cost, which has been calculated based on what you told the system that you use. You can then divide this figure by 12 to give a suggested monthly Direct Debit amount.
If you have any debt or credit, find out what this is from your supplier and divide this by 12 and either add (for debt) or subtract (for credit) this amount from the Direct Debit amount that you have calculated.
Direct Debit = (Annual Cost/12) + (Any Debt/12) - (Any Credit/12)
How to change your gas and electricity Direct Debit amount
Once you know how much you should be paying, call your energy supplier and explain that you wish to change your Direct Debit amounts, specifying what you would like it to be changed to. They may query your request, but you are now in a good position to justify your request. If they do not allow you to change your amount, you can argue that their figures are unreasonable.
The energy suppliers do not have to change your Direct Debit amounts, but by getting your facts together, you are putting yourself in a far better position.
If the gas and electricity supplier does not change your Direct Debit amount then you can vote with your feet!