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Updated on 03/12/24 by Abby_OVO

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For a visual guide to this Direct Debit calculation for a fixed rate plan check out the video below.

 

 

How do Direct Debits work?

 

A Direct Debit is an automatic monthly payment set up with your bank or building society. It means you can choose which day you want the payment to go out each month, and your bank will sort the rest.

Once a Direct Debit is set up, you don’t need to do anything else.

It’s often the best way to make regular payments, such as your energy bill.

 

Why paying by Direct Debit is the best way to pay

 

Direct Debit is usually the best way to pay bills because:

  • you get a cheaper rate if you’re on our variable Simpler Energy plan
  • you don’t have to think about it – it’s all done automatically each month
  • you don’t need to worry about forgetting or missing a payment
  • it can help you budget as you know how much is going out of your account each month and when
  • it spreads your energy costs evenly

 

How we work out your Direct Debit amount

 

To work out your monthly Direct Debit amount, we:

  • look at your energy use so far and estimate how much you’re likely to use by 31 March 2026. This includes any costs, such as standing charges and add-ons
  • take away your current balance, factoring in any credit or debt
  • divide the result by the number of payments left until 31 March 2026, which gives us your monthly amount

We aim to bring your balance to £0 by 31 March 2026. This way, you won't owe us anything, and we won't owe you anything, making it easier to manage your energy costs.

We regularly check your Direct Debit to make sure your balance is on track.

 

Why your Direct Debit amount might be different to your bill amount

 

Your energy use can vary from month to month, which means your actual bill may differ from your Direct Debit amount. 

To make sure you're paying the right amount, we spread your costs evenly, covering your total energy use until 31 March 2026.

 

Why meter readings are important

 

You can make sure your Direct Debit amount stays at the right level by giving us regular meter readings – once a month is best.

 

How we work out your Direct Debit amount when you join us

 

When you apply to switch to us, we’ll use your annual usage figures,  If you’re new to OVO, we work out your Direct Debit amount to cover your expected energy use until 31 March 2026. We base it on your past year’s energy use if you know it. If we don’t know it, we’ll ask you about your property and how many people live there, then we’ll base it on the average data for your type of household. After 1 month we check in to make sure the amount you’re paying is right for your actual energy use. Your Direct Debit amount might then need to go up or down.

 

How often we check you’re paying the right amount

 

We review your Direct Debit regularly to make sure you are paying the right amount for your energy use. 

We let you know if your Direct Debit amount needs to change to keep your balance on track to reach £0 by 31 March 2026.

 

When your payment amount might change

 

Your payments might need to go up or down if something changes, such as:

  • your energy use goes up or down
  • the price of energy goes up or down – if you’re on a standard variable tariff
  • you change which energy plan you’re on
  • you missed a payment or recently requested a refund
  • you’ve chosen an add-on, such as Greener Energy or OVO Foundation

If your Direct Debit is too high or too low, then we’ll let you know we’re going to have to change the amount.

 

If your balance is in credit

 

It’s normal for your balance to build up in summer when energy use is lower. This helps put extra money aside for higher winter bills, when most people use more energy to heat their homes.

We check you’re paying the right monthly amount so your balance stays on track to reach £0 by 31 March 2026.

Even if your balance is in credit, it might be that we still need to increase your monthly payments. This would be if we’ve worked out what your energy use is likely to be and that your balance is likely to go below £0 by 31 March 2026.

 

If your balance goes below zero

 

If your balance goes below zero, we’ll let you know if your monthly Direct Debit amount needs to go up.

If you’re struggling to pay your bills, we can work it out together - sign up to our payment support tool.

 

Setting up or changing a Direct Debit

 

You can set up, change the amount or date of your Direct Debit by logging into your online account and following these steps:

  • Go to Home
  • Select Set up your Direct Debit
  • Choose which day you’d like us to collect your payment each month. This can be any date from the 1st to the 28th
  • Enter your Direct Debit amount. You can use our Direct Debit calculator to get an accurate prediction of what you should pay each month
  • Put in your details, including your full name, sort code and bank account number
  • Select Next
  • Check the details you’ve entered are correct
  • Select Confirm payments

We’ll send you an email within 3 working days to let you know it’s all set up.

Find out how to set up or change a Direct Debit in the app.

 

 

Why meter readings are important

 

You can make sure your Direct Debit amount stays at the right level by giving us regular meter readings – once a month is best.

 

If you’re struggling to pay your bills, we can work it out together – sign up to our payment support tool.

 

What’s a Direct Debit Review?

 

As the amount or price of energy you use may change, we’ll regularly check that the payment amount is enough to cover your energy costs. There’s a breakdown of how we work this out on your Direct Debit calculator which can be found on the ‘Payments’ page of your online account or OVO app (download for Android or iOS).

 

Need more help?

 

We’ve got more details on understanding this Direct Debit calculator on the guide below,

 

 

Is there any support available if I’m struggling to pay for my energy?

 

There’s help available if you’re struggling to pay your energy bills – both from us here at OVO Energy and from government schemes and charities as well.

 

There are many ways we can help – such as setting up a payment plan for you, which spreads the cost of your energy to make it more manageable. If you want to find out about payment plans, you can request one online here – we’ll take you through what you need to do, and ask you for some details.

 

Our dedicated team is also specially trained to support you. They can make sure you’re receiving any financial assistance from the government that you’re eligible for, and take you through payment support schemes that are available. 

 

You can find out more about these schemes and where to seek free, independent advice right here.

Hi Blastoise186.

 

Thanks for the reply, I'm not trying to reduce my monthly payments I just don't want to be putting them up anymore. My point is thelat with every other company I've ever used it's sort of expected that you would build up credit during the summer and maybe go into a bit of a negative during the winter, that's kind of how it works isn't it?

 

… it's sort of expected that you would build up credit during the summer and maybe go into a bit of a negative during the winter, that's kind of how it works isn't it?

 

That’s how it works on rolling tariffs - i.e. variable plans. Your fixed-price contract, however, is for a limited period, at the end of which your balance should be close to zero - but not negative. That’s why you’re being asked to up your DD. It’s your choice, really - allow the £10 increase in DD to go ahead and pay off the expected shortfall over the months between now and the end of the contract, or make a top-up payment of £55 now and leave the DD as it is. 

As we are about to go into winter my balance ought to be in a good place, which it is. Currently paying £290 per month will your calculator says I will be in credit by £232 in 12 months time, so how the heck can it even suggest I lower the direct debit to £5 as a minimum?  It just does not compute.

It’s telling me £9 a month and it has to be a bug in the app as if you go to your account in a browser it will give a reasonable figure.

 

They ought to get onto this as it doesn’t inspire confidence and some may try to drop their payments to the recommended amount.

 

Hey @kwilson919,

 

If you go onto your browser as suggested by JohnCarter does it show a more sensible amount?

No, sadly it doesn’t as that is not working at all!

I think I can partly explain what is going on.

 

The app says I should pay £9 instead of my usual £180

 

The website which I said was correct says £180 is correct to cover me over the next 12 months,

 

but right now I’m £171 in credit and  if I click on ‘change amount’ on the website It then says £9 is correct for me because my 12 month period ends this month and £9 will make me break even on that date.

 

Presumably after that it will tell me to raise it again.

 

So it’s not wrong exactly., but needs addressing as it is confusing.

 

… my 12 month period ends this month ...

Presumably after that it will tell me to raise it again.

 

This will be the case if you’re on a fixed-rate tariff. You’ll have to check both your Plan page and your Renewal page to see (a) when your contract ends, and (b) how much you can expect to have to pay per year from next month on. If this month’s Direct Debit is taken as usual, you’ll be quite comfortable with the prospect of a lower DD as prices fall from 1 October.

Hi Everyone,

When OVO work out my predicted cost for my usage until 31 Mar and offer a suggested Direct Debit amount, does this include my existing balance or is it purely worked out on what I pay per month versus what I will use by 31 Mar.

I have a healthy balance currently but if I ask for some of that to be refunded will my monthly Direct Debit go up?

Thank you.

Edit:

Apologies, I think I have read the answer now, yes the balance is taken into account. 

Would still be grateful if anyone can confirm this to be the case.

Yes the existing balance, credit or debit, is taken into account when calculating DDs and deducted (if credit) or added (if debit) to you predicted cost for future use.

When they first started calculating them (for Standerd Variable Tariff*) to reach zero on 31st March, rather than 12 months from when the calculation is done, that change led to some interestingly very high DD calculations for those with a largish debit balance - which because of the change then wanted paying off in less months than 12.

* If you fix your tariff then your DDs are calculated to attain a zero balance at the end date of the fix rather than 31st March.

In either case, variable of fixed tariff:
If you have a credit balance and withdaw some or all of it then your recommended DDs will increase accordingly so that they cover your predicted usage.

Conversely if you pay off a debit balance then your recommended DDs will reduce because you no longer have the debt part to pay each month.

Would still be grateful if anyone can confirm this to be the case.

 

If you use the Direct Debit calculator on the website, the button labelled Change Direct Debit amount will take you to the page where you can … errr … change the DD amount. On that page, just below the green button that you should be very wary of clicking is a message reading How we work it out. It’s quite a simple calculation for most people, apart from working out just how much to deduct from the expected annual usage for the bit beyond 31 March next year (or the end of the contract for those on a fixed-rate tariff).

Thank you, @Nukecad  for your helpful answer.

Thank you @Firedog too, that was what I found and read after I’d written my initial post 🤦🏻

Hey @Jasmin10,

 

I can see other community members have already given some really helpful responses here 😊 Just wanted to add, the following topics may be helpful:

 

 

Right folks, I’ve had a look around the forum and can’t see an recent answer or reply to this type query, so apologies if I’m asking a daft question.

I currently pay £X per month and this allows me to build up a fair amount of credit heading into the winter months, to the point even after winter bills, I still have a positive balance, last payment was the 1st Aug, meter readings were sent on the 9th Aug, currently £852 in credit.

I’m now at the stage where I’m being told my meters need replacing to smart meters*

(*smart meters send us accurate readings, so you only pay for what you use)

So, can someone please tell me, would my bills fluctuate or would my DD remain the same and it’s only my balance I owe/credit balance will be a more accurate reading?

I don’t want to suddenly be paying extra in winter, but less in summer, although it may appear even allowing for summer usage my DD is too high, I like to keep it constant.

 

Thanks.

Your dd is calculated in exactly the same way @Wullie. so the smart meter reading just helps to keep things up to date. 
Your payment is designed to be the same all year around 

 

Cheers, thanks for the answer.

 

 

Hi I am moving next weekend and set up a new account with OVO through an app called Tili which my estate agents required me to use. I set it all up fine for a fixed term at £99 a month. Today I have received confirmation from OVO and although my direct debit amount is correct, they have put the costs as below which must be a typo as otherwise that is insane and impossible! I’ve tried contacting them through live chat but that is useless and the phones aren’t open until Monday.

Any help would be greatly appreciated! 

 

Yes, there’s some odd calculations there. 
You can check yourself by using the unit prices and multiplying by the kWh expected usage. 
So

0.2404 x 1939 for Electric and

0.0644 x 9266 for Gas
Don’t forget to add on the standing charges too

At a quick glance without calculating it all then it looks to be a factor of x100.

ie. £9900 a month instead of £99.

Looks like a programming/input error for that message and the figures for the rates and SCs have been used as £’s instead of pence?

Have you logged onto your new account and seen what it says there?

As long as it’s just that message that is wrong and things are correct on the account, particularly the required DD amount, then I wouldn’t worry too much.

Thank you both! I finally got through on the live chat and they have confirmed it is incorrect. I checked against the Tili confirmation and OVO’s confirmation and yes it is x100, the decimal point must have been put in the wrong spot! I know energy prices have gone up but I think that’s a bit excessive! 

Good to hear that is all that it was.

I'll hold my hand up that I've done similar myself on spreadsheets and forgot to divide by 100 when entering things as just pennies so they end up being calculated as £s instead. (and I'll bet I'm not the only one who's done that).

Usually it's not a difficult error to spot because the results then end up 100 times too big.

Hey @Jess24 

 

Sorry about the confusion you had there with the tariff details.

 

Glad to see some of our volunteers have already stopped by to help clear things up for you.

 

Feel free to pop back to the Forum any time if you’ve ever got any questions or issues, we’ll do our best to help out.😊

Why has my DD increased when my account is in credit by almost £100.00?

Good evening ​@Snoopy34 ,

Please be advised that Forum Volunteers don’t have access to your account and we don’t exactly have Crystal Ball powers. You’re gonna need to tell us more info if you want our advice, otherwise I’m afraid your question can’t be answered and may end up going stale.

Have a look at the DD calculator. This will show how your balance will change over the next few months. If the figure in the box is the new DD, you should see the bars coming down to near zero. Put in the old DD to see where the balance was heading before the increase.

Click on Continue to see a few more details. Click on How we work out the minimum monthly payment to see where the new number comes from. 

The figure will be based on the numbers in your Plan. The Future Annual Consumption should be close to your actual consumption over the past twelve months. If it’s a long way off, the calculation will give an equally inaccurate minimum monthly payment.  

Last, you should be given reasonable notice before the DD is changed. Did you not get a notification a few days earlier suggesting that you should increase it?

This is a new system; it’s the same calculation whether you’re on the Standard Variable Tariff (‘Simpler energy’) or on a fixed-rate one. Some of us don’t think it’s fair.

How do direct debits work | Customer Help and FAQ 

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