31st March 2026!!!

It is relevant, because winter is deemed to end for everyone on 31 March. If you have a look at the bar chart I posted earlier showing the balance for the ‘typical’ customer, you’ll see that in order to maintain the one-month’s-costs buffer all year round, he should by the end of June have accumulated a balance on the electricity account about 42% higher than it was on 31 March. If you were to insist on the calculation running to the end of your fixed plan, you would very probably run into debt next winter, other things being equal. 

The days when your DD would bring your balance to zero (after 12 months for those on variable tariffs, or at the end of the contract for others) are past, because too many found themselves in financial straits when renewing or switching to a different supplier. That’s one of the reasons why energy suppliers are collectively shouldering a debt of over £4 billion and why everyone’s standing charges are rising to write off some of it as unrecoverable.

Winter may end on 31st march but my contract with OVO ends in June. I have been with them since June 2022 and am in my 4th fixed deal. I don't believe I am a "typical" customer. I have been in credit since June 2022 and never in debit. Due to the records I keep with regards to my gas and electric use, I can tell you what my current bill is on a daily basis, up to an accuracy of approximately 2p. 1p this morning!

OVO used to calculate my payments up to the end of my fixed deal and I used that calculation to reduce my payments regularly. I believe that in 2024/25 I had reduced my payments 3 or 4 times until OVO started using this stupid date or 31st march 2026. I can assure you I will be in credit in June. I will not be in debit next winter as I will either not be with OVO or in another fixed dean that will be in credit all the time as have the previous 3 and by then, 4. So as I say. March 31st is not relevant to me.

Firedog, you make a good point that the core terms mention keeping the account in credit, but it does not say by a month’s payment as was recently introduced. The help sections of the app do not reflect this new stance either, in that they say “ because of the way this works, it's normal for your balance to be in credit at some points [of the year] and not in credit at others. It should all even out over the year”.

I would be much happier making a balancing payment at year end ( or end of contract) rather than having my cash tied up with OVO for a year with them earning interest. Like others on the forum I have a long standing spreadsheet which predicts my bill to withing a pound or two so it would be relatively easy to do this.

Given that OVO are continually trying to make customers use the app (well, they do for some of their initiatives) rather than the Online Portal, it is, in my opinion, ironic that this has not been updated in line with what appears in the online Help accessed via the Portal. This states when explaining Direct Debit amounts: 

“The aim is to make sure you have credit for 1 month’s payment in your OVO account by the end of March. This is to help cover any change in your home energy use over the course of the year. 

For new customers, this only comes into effect once you’ve reached March. When you first join, the aim is to make sure you have no balance left to pay after 1 year.”

Personally, and I have informed OVO of this many times, my deteriorating sight make the use of apps difficult for me. 

Type your comment here

I couldn’t find that passage anywhere, which only exposes how pitiful my search attempts are. Can you explain how you found it and perhaps post a screenshot of the page you found? It hasn’t been ‘normal’ for several years for an account to be in debt.

As regards having capital tied up in your energy account earning interest for OVO, could you suggest just how much this is costing you in lost interest at, say, 4%?
  

[EDIT the following morning ...]

Just for fun, I worked out how much interest at 4% I would have earned on the balance in my account had it been deposited in a savings account with a DD designed to end a year (a) at zero and (b) at 1/12 of the total annual fuel cost. (a) came to £1.14, (b) to £1.97. So OVO’s new policy is costing me 83p a year, based on a total fuel bill of £454.  I don’t think I’ll get worked up about that.

No, no-one is. The ‘typical’ household is a construct designed to make it possible to compare tariffs from time to time and from different suppliers. In the present context, the typical electricity customer is one whose usage varies from month to month according to the pattern I showed earlier. 

Prompted by your comments, I did a little comparison of my personal costs with the ones ‘forecast’ by the DD calculator. I chose the latest year to 31 March; the actual costs are calculated using the tariff in force each day, while the forecast uses the tariff applying on 1 April as it normally would. There were four tariff changes during the year as I migrated from one fixed deal to another. The total annual consumption is the same for both sets. This was the result:
  

The degree of conformity took me by surprise. 
    

Well, yes, I’d expect you to be. As I think I pointed out earlier, the new regime would provide the ‘typical’ customer with a credit balance of about 1.4 times the calculated DD by the end of June. Anything less, and the DD may be too small. 

It would be pointless to devise a system to produce a budget outlay that could take every individual’s quirks into account. Circumstances can after all change overnight. Perhaps you could tell us why you’re so concerned about the new way of calculating Direct Debits. 

I cannot say it for certain, but, from my understanding, energy suppliers cannot earn any interest on the credit balance of their customers.  They are not allowed to do so.

I’m studying Bookkeeping and we are on this topic right now. Financial year for companies ends on the 31st March. I think that's the reson! Don't get confused with rhe financial year for individuals, which ends on the 5th April. 

Thanks ​@costeek for that insight - sheds more light on the date being so specific. I’ll see if I can get some further info from the Direct Debits team that I can pass on.

I hope your course goes well!

I have been waiting for this date to change to March 31st 2027 (it changed to the 2026 date in around November/December 2024). I suspect that this not happened this time as there is the “£150 government reduction” from April 2026 that all companies have got to factor into their calculations. I have not seen any details, anywhere, of how this will be enacted.