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# Will OVO introduce variable Direct Debits where a smart meter is installed?

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Will OVO introduce variable DDs where a smart meter is installed?

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Best answer by Tim_OVO 30 September 2020, 10:33

This is an interesting question, @lap - keen to understand the thinking behind it.

I’ve taken the info below from this topic on Direct Debit calculating. Is there an advantage to have a Direct Debit change within a contract? Isn’t it better (for example, for budgeting) if this payment is roughly the same all year round?

## How do you calculate my Direct Debit?

When you come on supply with us, we’ll use your annual usage figures to calculate how much your energy will cost over the year. Once we’ve got the annual amount, we’ll divide this into 12 - this will give us the Direct Debit amount.

If you haven’t got your annual usage figures, we’ll use the national averages. You would then need to send us regular readings for at least 3 months, then we’ll manually calculate your payment amount using your projected usage. More info on this here

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Userlevel 6
+2

@lap Currently it doesn't appear to be an option but... i know they are revamping tarrifs so, maybe!

Userlevel 7

This is an interesting question, @lap - keen to understand the thinking behind it.

I’ve taken the info below from this topic on Direct Debit calculating. Is there an advantage to have a Direct Debit change within a contract? Isn’t it better (for example, for budgeting) if this payment is roughly the same all year round?

## How do you calculate my Direct Debit?

When you come on supply with us, we’ll use your annual usage figures to calculate how much your energy will cost over the year. Once we’ve got the annual amount, we’ll divide this into 12 - this will give us the Direct Debit amount.

If you haven’t got your annual usage figures, we’ll use the national averages. You would then need to send us regular readings for at least 3 months, then we’ll manually calculate your payment amount using your projected usage. More info on this here

Userlevel 6
+2

@Tim_OVO personally I prefer a fixed (and balanced) amount as ovo pays good interest in credit for summer and then i don't need to panic in winter

This is an interesting question, @lap - keen to understand the thinking behind it.

I’ve taken the info below from this topic on Direct Debit calculating. Is there an advantage to have a Direct Debit change within a contract? Isn’t it better (for example, for budgeting) if this payment is roughly the same all year round?

## How do you calculate my Direct Debit?

When you come on supply with us, we’ll use your annual usage figures to calculate how much your energy will cost over the year. Once we’ve got the annual amount, we’ll divide this into 12 - this will give us the Direct Debit amount.

If you haven’t got your annual usage figures, we’ll use the national averages. You would then need to send us regular readings for at least 3 months, then we’ll manually calculated the annual figure.

Thank you - I know how you calculate the monthly DD and appreciate that many people will prefer to budget in this way. However, smart meters mean that you can keep a check on your actual expenditure and budget accordingly. Based on my summer months’ usage,  my account is currently 2 months in credit. I have been getting emails from OVO for several months asking me to increase my DD as there is likely to be a shortfall by the end of the contract. I would rather have the money in my account so if there was a choice would opt for a variable DD and pay as I go. - hence the question. I know it wouldn’t suit everyone but it would me!

Userlevel 7

Based on my summer months’ usage,  my account is currently 2 months in credit. I have been getting emails from OVO for several months asking me to increase my DD as there is likely to be a shortfall by the end of the contract. I would rather have the money in my account so if there was a choice would opt for a variable DD and pay as I go. - hence the question. I know it wouldn’t suit everyone but it would me!

Thanks for this, @lap

I’d love to understand this a bit more: when you say you would rather have the money in your account, are you referring to your bank account?

I can appreciate your point that smart meters allow for accurate billing. So in a way it could be customer choice to ‘pay as you go’ in the summer and bump up the costs in the winter. I suspect the thinking against this is two fold: the customer is at a higher risk of falling into debt at a future date (winter), with such a business model would come a financial risk for the business. Two, fixed customers pay for their energy in advance, in bulk, allowing for lower prices.