Variable Direct Debit is when, at the end of each billing cycle, the actual full amount of your bill is taken from your bank account by Direct Debit This means that you never build up any credit with OVO, but keep the benefits of paying lower standing and unit charges when compared with Pay on Demand customers. It, of course, means that, for most people, bills will be higher in winter than in summer months. MANY energy companies offer this as an option. Personally, I would not choose this way to pay my bills because, being a pensioner, I am on a fixed income so prefer a similar amount leaving my bank account each month that covers my yearly energy bill. However, I wonder how many who choose the “Pay on Demand” option (Standard Credit) would prefer to pay in this way if it meant lower standing and unit charges?
Has OVO ever considered offering Variable Direct Debit as an option for customers?
Best answer by Blastoise186
Hi
This used to be supported by OVO in the early days, but was terminated around 2018-ish and there’s no plans to bring it back.
Variable DD appears to be fading away in the energy market and newer suppliers (like the smaller players) don’t seem to offer them. I can’t make any promises that this option will continue into the future, so I’d say it’s better to consider only Fixed Direct Debit to be around in the future rather than Variable Direct Debit. It’s better for your money management anyway because it smooths things over!
Pay On-Demand will likely always be more expensive due to higher default risks.
+1- Plan Zero Hero
- Answer
Hi
This used to be supported by OVO in the early days, but was terminated around 2018-ish and there’s no plans to bring it back.
Variable DD appears to be fading away in the energy market and newer suppliers (like the smaller players) don’t seem to offer them. I can’t make any promises that this option will continue into the future, so I’d say it’s better to consider only Fixed Direct Debit to be around in the future rather than Variable Direct Debit. It’s better for your money management anyway because it smooths things over!
Pay On-Demand will likely always be more expensive due to higher default risks.
I still find it strange that customers cannot use that option. Make something like a “trial” period for new customers, if you worry that they wouldn’t pay bills on time. And if they pay on time, let them use the Variable DD. With Variable DD I’m more aware of how much energy I use. Being more aware, mens being better with moving energy use to the greener hours.
+1- Plan Zero Hero
It’s very unlikely Variable DD will ever be an option again with OVO, even for a “trial” period. The complexity of bringing it back is likely higher than any value that OVO would gain.
Pay On-Demand already does that for those who truly want to pay for exactly what they use each month and be exposed to having to pay the entire outstanding balance directly from their bank accounts every month. There’s not much value in making it more complicated...
Now that the PAYG standing and unit charges are similar to DD, perhaps that method of payment will become more popular, particularly with those with smart meters as you have the ability to top up online. Although this does mean paying in advance rather than after using energy.
With Variable DD I’m more aware of how much energy I use. Being more aware, mens being better with moving energy use to the greener hours.
Since I have smart meters, I know exactly how much my energy has cost each day by logging in to my online account. Yesterday, my energy cost (including standing charges and VAT) was £3.23.
- Plan Zero Hero
Although this does mean paying in advance rather than after using energy.
Ah, but when yo stop and tink about it OVOs current policy of getting DD customers to always be at least a month in credit also means effectively paying in advance for every month.
You have at least a months credit, you use it up during the month and top-up a new DD of a months credit, and so on.
That’s paying in advance
+1- Plan Zero Hero
From memory, it was apparently a thing on Apollo for a while but was later terminated. IIRC it has never been supported on Orion.
- Plan Zero Hero
Oh please Ben, I’m surprised at you.
You know that we know better than that.
Being 1 month in credit on 31st of March, at the end of winter, is nothing whatsoever to do with averaging out usage over 12 months to cover higher winter costs.
(OVO’s online articles and even the DD calculator ‘recommend’ have given up trying to pretend that).
True averaging out, as as has been done traditionally, would be a zero balance at some point in each 12 months, again traditionally that was the 12 month anuversary of you creating your energy account.
A few years ago OVO decided to instead align it so that the zero balance point became the 31st March each year for all DD customers - regardless of their account creation date or any Fixed tariff dates.
Then earlier this years OVO decided to change that policy again so that instead of zero balance it would build up a months credit by 31st March.
Meaning that DD customers once at that 1-months credit point should then remain at least a month in credit at all times, ie.every day of the year not just on billing/statement day.
The current policy of increasing DDs to build a months credit at all times on all DD accounts is simply about changing to taking DD payment in advance. (So that the daily Live Balance never dips below zero for a DD customer).
It is an attempt to try and ensure that customers comply with the OVO T&C’s which do clearly state that your account should always be in credit.
Always in this case being interpreted as every single days balance, which is what Live Billing can now show, rather than just the balance on your billing/statement date.
Explain the current policy as what it is, an attempt to get DD customers to comply with the T&C’s of their contracts to always be in credit, every single day.
Most people will understand that.
Of course we may still not like the heavy-handed way that it is being done, but that’s a different grumble.
Then earlier this years OVO decided to change that policy again so that instead of zero balance it would build up a months credit by 31st March.
Wow, I didn’t know that. I have mixed feeling, to be honest. I can understand the reasoning behind having zero on each 31st March. But why credit? Imagine every single company would start to build a credit - average person isn’t that reach.
Im quite new to OVO billing.
Ive been a long customer but only recently got acces to my bills and account and how OVO works charges out properly.
Its all a little convoluted tbh.
It displays your bills weird.
Billing period is 22nd-22nd
Youre shown your usage from 1st-30th/31st
Your real time bill will be 22nd-22nd though I think.
So thats dumb. Only benefits OVO.
When they work put your DB its wildly inaccurate.
In my case OVO expect me to use over £120next month and then less and less until my bill is paid pff.
Its not actually working out my future from my past. My two winter bills have been around £60 or less.
We have smart meters to stop guesses.
None of us want to be in credit with OVO.
Just let us pay what we owe (even though were charged before we use it)
Just not set up for the customer, at all...
Yeah, theyre conmen.
"Make sure youre all a month in credit in time for our tax bill come April"
not coming at you Nuke lol, this is OVOs policy below.
“It is an attempt to try and ensure that customers comply with the OVO T&C’s which do clearly state that your account should always be in credit.
Always in this case being interpreted as every single days balance, which is what Live Billing can now show, rather than just the balance on your billing/statement date.”
A penny would be in credit.
Doesn't have to be an estimated £181 when your average is around £60….
“
Explain the current policy as what it is, an attempt to get DD customers to comply with the T&C’s of their contracts to always be in credit, every single day.
Most people will understand that.
Of course we may still not like the heavy-handed way that it is being done, but that’s a different grumble.”
Sums it up perfectly!
This month the billing period is 32 days.
Not really as with my billing period which is 4th November to 3rd December. The reading taken around midnight on 4th November is the one used to generate the closing reading of 3rd November as OVO only bills for COMPLETED DAYS. It is also used as the opening reading (i,e, before any further energy is used) for 4th November. Then 30 readings will be made ending up with the reading taken on 4th December. This reading will be used for the end of my current billing cycle and for the start of the next one.
Count the circles on the calendar - there are 30 and they represent the number of days in November.
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