Monthly Direct Debit vs Monthly Bank Transfer - which is better?

Hello Jeffus.

Thank you for the detailed answer.  I won’t cancel the direct debit until I have a monthly bank transfer set up - if that’s feasible.

Thanks again, Jeffus.

@mwrutherford let us know what you decide to do after speaking to OVO in case it helps others in a similar situation.

Good luck whatever you do.

Strictly speaking, I don’t think OVO supports Standing Orders and I’m not aware of any supplier that does either. The only way you can do a monthly fixed rate bank transfer with OVO is via Direct Debit - any other payment method will cause your account to be put on the variable rate Simpler Energy tariff on a pay on-demand basis and you’d be asked to pay the full amount every month.

@Blastoise186 

Good point, I think he is just asking to pay on receipt of bill. I didn't hear any mention of fixed amount or standing order. 

This page specifically mentions bank transfer, which could of course be done monthly on receipt of a bill i assume?

I think that is all the poster is asking? 

Yup, bank transfers are available if you’re paying on receipt/on-demand. However, OVO does also offer the Fixed Direct Debit regardless of tariff type and making a card payment is faster than a bank transfer while also giving you instant  confirmation.

I’d personally only recommend doing bank transfers in cases where you’re unable to use any other method, since it takes up to 5 working days to process in some cases and won’t show up at all until OVO has processed it.

You say tarrif will rise if paying on demand but this contradicts another forum co tributer who states the tariff rate is the same however you pay. Also, ovo state that if you cancel your direct debit ( they simply don't answer the phone quick enough, I.e. within half an hour) they send an email asking how you want to pay from now on. I'm doing g that as 350 quid from my 740 quid pension is simply unsustainable for me.

I can confirm that I’ve seen cases across a lot of suppliers where paying on-demand is more expensive than paying via Direct Debit. This also appears to be the case with OVO based on historical information that I gathered a while ago.

Can I cancel my direct debit for a fixed amount and just pay direct debit for what I use?

I would like to just pay each month for what I’ve used that month (I understand that will cost more over the winter). I’d ideally like to keep it via direct debit but if not just be issued with bills.

Is this possible? Is it a different tariff? I read through FAQ but the only thing I could find is it’ll cost around £129 a year extra but with no info about how this is calculated.

I have tried online chat but I couldn’t get an answer he just kept saying you can view your bills online.

Hi @smithyuk1 ,

I’m afraid OVO doesn’t support Variable Direct Debits anymore. If you want to pay for only what you use in a particular month, you’ll need to cancel the Direct Debit and go onto Simpler Energy On-Demand. Be warned that you will lose your Direct Debit discounts and any fixed rate deals that you may be on. It may cost you around £200 a year more as well.

Thanks for the answer.

I am not on a fixed rate deal. How do you tell if have a direct debit discount?

Is Simpler Energy on Demand a different cost to Simpler Energy (my current tariff)? If it is do you know where I can find the cost of that tariff?

Thanks for your help

I don’t know where the details are I’m afraid, but you would be notified automatically if the tariff is about to be changed as a result of cancelling the DD. To be honest, you’re probably better off leaving things as they are but it’s ultimately your decision, and yours alone.

Thanks for your help.

Without knowing the details I don’t know if I’m worse/better off or not.

I’ll have to give in and call to find out I think!

Thanks

Hey @mwrutherford,

Welcome to the OVO Online Community.

I can see you have met two of our community volunteers @Jeffus  and @Blastoise186 who have already given some helpful advice. 

Just wanted to step in to clarify we have two Simpler Variable Plans one where you pay on demand and one paid by direct debit. You get cheaper rates on the Simpler Variable paid by direct debit. 

It’s your choice how you pay but we would recommend continuing to pay by direct debit, as it’s cheaper, avoids a large spike in bills over the winter period and is automated. 

Here’s a helpful guide which explain how OVO’s direct debit reviews work:

• Getting to grips with the Direct Debit Calculator on your online account Tutorial

Here are some extra resources you might find helpful:

Price rises: we're here to support you

Here’s the latest information on rising energy prices, and how we can help 

Energy Bills Support Scheme

This page has all the information that we and our call centre team have on the Energy Bills Support Scheme right now. 

Ways to get financial support

If you’re struggling financially or you’re worried about your energy bills, we’re here to support you. Find out about the different ways we can help here.

Hope this helps!

OFGEM publishes the maximum charges in tables, based on zero consumption, and then 3,100 units of electricity, and 12,000 units of gas.  Assuming that suppliers charge the maximum for the standing charge (most do) it’s then possible to work out the likely standing charge daily figure and the unit rates too.  However, there are maximum figures for two fuels, 13 regions, and 3 methods of payment, plus economy 7/10.  So the devil is in the detail.

So here goes. Assuming suppliers charge the maximum amount for the standing charge, from October 2022, pay on receipt of bill for Gas the standing charge is 17.7% higher (applies everywhere) than if you pay by Direct Debit.  Electricity standing charge is between 12.1% and 16.1 % higher depending on your region.  Unit rates for both fuels are at least 5.3% higher.  The average OFGEM dual fuel customer will pay an additional £215 per annum.

I don’t know whether suppliers have actually published their rates yet, because OFGEM does allow them some wiggle room in setting their own rates, but internally they know what they will be and are no doubt using that information to revise Direct Debits going forward.  However, there would in normal circumstances be another OFGEM increase in the price caps in January 2023, but pending the Government announcement expected on 8th September, we don’t have a clue about how the support will be structured or implemented, how things will work in the future remains a big unknown.

What fees are incurred by cancelling the DD and settling in full every month?

I am not sure who wrote the code but the predictor to rubbish wildly swings up and down even with a reduction in usage across the month to the previous… it anxiety-inducing. Usage is on the decline and DD increases from the previous month ??? with 0 arrears.

From calculations others have done elsewhere it looks like your cost would be around £200 more for the year. It will depend on your specific energy use though @ModsAreKeyboardWarriors 

Thanks BPLightLog.  

Hi there

i have received an email saying that my direct debit is going to change from variable quarterly to a monthly fixed amount. I’m quite happy paying as I am and trying to find out if this is compulsory . Any information on this would be appreciated 

Davesea

Hi @Davesea ,

OVO doesn’t do Variable DD. You’re probably best off accepting the change, but if you really don’t like it you can discuss options by calling the Collections Team on 0800 069 9831.

Hey @Davesea,

Welcome to the OVO Online Community,

Just to add to what @Blastoise186 has advised, you do have the option to pay on receipt of your bill and cancelling your direct debit. But it works out more expensive, the following topics might be helpful to you:

• How does OVO Energy calculate my Direct Debit? Tutorial

We are all aware of Direct Debit payments and know these can sometimes be the dodgy way to pay. They are dodgy in that these payments rely on you having enough money in your account when the payment is due to be collected. Having said that they are also a convienient way to pay without having to remember to do so and are prefered by utilities and many other businesses for good reason.

Before I moved to OVO my energy bills were collected by Direcet Debit quarterly on demand in full. This method is used by many other companies notably mobile phone operators who collect payments though a variable monthly direct debit arrangement. SSE ended mine before the transfer to OVO who have not re-introduced it.

Instead energy providers only collect direct debits on a fixed monthly payment. Why? When paying the bill in full each month is preferable rather than a fixed amount where sometimes you overpay and others underpay. Often customers end up with a credit balance.

Can OVO re-introduce varible Direct Debit payments? I prefer this so I pay more in the winter and have lighter bills in the summer. I’m interested to hear the reason this payment method is not offered.

You’re not the first to ask about this. You might want to add your vote here:
 

It is also worth noting that I don’t personally consider your reason for FDD being “dodgy” as being valid. If you’ve got bills to pay, you need to have the funds available by the due date regardless of how you pay. That alone kinda wipes out your reasoning tbh.