Increase to Direct Debit - new way of calculating Direct Debit amount?

When I shop at the supermarket, or buy diesel for my car, or buy a latte, I don’t get billed for that a month in advance, “for my convenience”. 
 

It’s pure and simply bankrolling of OVO.  Especially when the email informing me of the change comes after the email about the automatic DD increase. 
 

Complaint on the way, but I know it’s a waste of time.  I would love to move…. But they all seem to follow themselves ultimately in how badly they treat customers. Race to the bottom. 
 

No you don’t.

However you do hand over payment for them before you consume them.

The diesel is a particularly good comparison:
If you put a months worth of diesel in your tank then you pay before you use that energy to power your car over the next month.

That is what having a months credit on your energy account balance at the end of each month also effectively achieves, that credit is paying for your next months energy before you use it.

Which is the same as you paying for your diesel before you use it, (and paying for your coffee before you drink it).

I hear your argument. It rather ignores a few fundamentals:

I am already in credit with OVO. And not getting interest on that credit any more. Just not the the amount they desire it to be. I am not already in credit to the petrol station or coffee shop.

I don’t have a contract with a petrol station or coffee shop. I do with OVO. 

The historical norm is to pay for goods or services on receipt, eg after receiving a bill or invoice. Money is a form of “IOU”. (Eg on bank notes “I promise to pay the bearer…”)

Continuing your argument, I should be paid my salary a month before I do a months work. Good luck with arguing that one to employers.

Have you ever tried to get credit back from OVO…? They used to pay interest, then that stopped. Then they set a % limit of how much of your own credit you could “request” back per request. Before you initiate the process, they make it seem straightforward and easy. Then once you actually try it, all the “ifs, buts and maybes” come out. 

And I would also add, at the beginning of the year I set the DD payment to that recommended by OVO themselves. Their DD calculator confirmed “we think you are paying the right amount”!

We use less than the predicted amounts. 
Yet the goalposts get moved, mid contract, to bank roll OVO. 
If they collapse, are customers likely to get their credit back? I would guess not. 

Of course historical norms change, otherwise it would still be the norm to use horses and sailing ships for transport, and heat our homes with coal fires.

It was the historical norm for PAYG meters to take coins and someone would come round and empty them once a month, things change.

I do hear what you are saying, I’m not keen on the changes either and I am actively controling my DD’s to give just over zero balance on 31st March 2026.

(Hint- once youve looked at the DD calculator chart click the ‘continue’ button, scroll down, and take the 10% reduction to counteract their 8% ‘month-in-credit’ increase. You can’t keep that up forever though as after 3 months it will set a higher recommended DD, and so it will get you eventually).

There again if you don’t like what OVO are doing then you can always vote with your feet, be careful though because a switch may cost you more than it might look at first.

eg. I could switch supplier and currently would pay a lower DD amount each month - however I would then be paying a higher rate for my energy use.
With OVO they currently want a higher DD, but that’s  building up a months credit, it’s still MY credit (My money).
Once I do have that months credit built up then my DD with OVO should be lower than it would be with another supplier.

It’s the difference between a short term view and a longer term view.

There aren’t really any ‘predicted amounts’. The DD calculator’s Cost chart shows only how the previous year’s consumption might be apportioned over twelve months. At this time of year, there may only be three or four months left on the chart, but they are expensive ones. The first quarter is nominally responsible for 29% of the year’s consumption; add in December’s contribution and the four months account for 40%. 

If the ‘predicted amounts’ are currently bigger than your actual usage, then either your consumption year on year is falling, or there are other months when you use more. If consumption is falling, the ‘previous year’s consumption’ will also be falling, so the effect you see will lessen over time.

This time last year, the target date had been pushed out a year, so we were expected in December 2024 to be aiming for a zero balance by 31 March 2026. This hasn’t happened yet this year, so it may be that the ‘extra month’s costs’ added to the DD are somehow instead of the extension. The extra will of course become more onerous as we approach 31 March, simply because there are fewer months to amass it in. 

In any event, the extra cost is IMO not really significant. The pecuniary loss is immaterial, so it can surely only be the principle that causes so much ill-feeling.

When energy companies collapse, those in credit NEVER lose the credit they have with that company. See https://www.ofgem.gov.uk/what-happens-if-your-energy-supplier-goes-bust where it explains this. If you have ever paid for something in advance from a retail company (for example, some furniture), you almost never have this level of protection and you become one of the many creditors of that company. There is a hierarchy of who gets paid first, if at all. 

Morning ​@Carter_99, I hope you’re well, and many thanks ​@Bendog, ​@Nukecad and ​@Firedog for your input here.

​@Carter_99 as Bendog says, your credit is guaranteed by Ofgem if a supplier goes bust. I’m well versed in this situation, having worked for OVO during the company being chosen as Supplier of Last Resort (SoLR) in this scenario. I’ve also been on supply previously with a supplier who went bust, so have been through this myself. Although it was slightly annoying, I got my credit back quite quickly. 

Regarding the interest reward that we historically used to pay on credit balances, we had to scrap this as it wasn’t falling under the Ofgem expectations of treating all customers fairly. Of course it was a shame for customers when we stopped this, but sometimes we have to alter our offerings and propositions to fall in line with Industry expectations.

As for the Direct Debit - we’re not the only supplier who charges and reviews Direct Debits in the way that we do. It’s a one-size-fits-all approach that won’t suit everyone. Apologies if it doesn’t suit you. Be prepared to not have a complaint logged if you do contact in to make one - if the complaint is only about the Direct Debit review procedure than it will be logged as feedback, as it’s a policy that we’re not going to change. However, if there’s an actual issue with your account, that’s causing an incorrect increase to your Direct Debit, then this of course can be logged as a complaint.

You do also have the option of cancelling your Direct Debit and moving onto the Simpler Energy (variable) plan to pay on demand. Please note this may cause an increase to your rates if you choose to do this.

I hope this helps.

So I'm currently £287 in credit and paying £175 per month. 

OVO wants it up to £205 per month to cover me till march. 

Great, except my usage will drop as I'm away for 2 months, but the system won't let me keep my DD at the same amount.

Come on OVO, I've been in this house 20 plus years. You've already ripped me off by changing my tariff (to a much more expensive one, obviously!)when you installed my smart meter, don't do it again....

‘The system’ may not, but a support agent will be able to do more. Give them a call:  Emergency contact information, scheduled PAYG outages, and methods for contacting OVO - (December 2025) | The OVO Forum
   

This sounds odd, unless you’re referring to exchanging an RTS system for a smart meter. Even in that situation, you shouldn’t be worse off after the exchange, although you might have to make some behaviour changes to arrive at the most economical outcome. If this is your situation and you’d like help, please use the Ask our community button to start your own thread about it. 

That's what happened.. I had the old meter and when it was phased out I got the smart meter. 

Was told my tariff wasn't compatible with the new meter and was put on a tariff that more than halves the amount of off peak electricity I get.…

You will have been given a choice before the meter exchange, so it may not be completely accurate to say you were ‘put on a tariff’. 

There’s no limit on how much offpeak electricity you can use (within reason, that is). The number of offpeak hours may be lower, though; some RTS systems had a separate 24-hour lower heating tariff, but that will have gone. Some RTS replacements are configured for 10 hours offpeak, possibly more than were originally available for storage heaters. Which tariff are you now on? Do you have storage heaters?

I was on a tariff for about 25 years, which was done away with because it wasn't profitable enough…

It gave 12 hours off peak per weekday all day at weekends , plus a separate lower stored heat rate. 

Changing to smart meter, I was told the only tariff I could have now is economy 10.... So I've lost 60 hours off peak electricity per week. 

So yeah, I got the choice of economy 7 or economy 10.…

Not really a choice though.

No comparison there, I see - depending on what the peak, offpeak and heating rates were, of course. Some of the ones I’ve seen were eye-watering. I hope you’re managing to keep warm at a manageable cost.

Did you ask Support if you could freeze your DD for three months in view of your forthcoming absence? What did they say?

Yeah I've been stiffed big time on tariffs. I'm lucky I can afford it but there must be many in the same position for whom it was disastrous. 

I've emailed OVO to tell them to leave my DD alone. I shouldn't have to explain why!

However, as you have explained, your meter was replaced recently due to the switching off of the RDS system, something outside of the control of every company. You have a new tariff so OVO have no idea how much energy you are likely to consume as they will not have enough data from you to make a proper estimate. If you are unwilling to give them the information that might help, then, perhaps, if you can afford it, you should enjoy your time away, safe in the knowledge that, when you return, you will have credit on your account that will allow you to heat up your home again after being empty. As many of us found in the cold snap in November and the below 0°C temperatures of just a few days ago, warming up the fabric of our homes as well as the interior of them takes quite a while. If, at the end of the winter, you have a lot of credit, you can, of course, request a refund. 

The data for my winter usage is available from previous years... The pricing has rocketed but the number of KW/h is a standard. 

 So my payments stay the same, rather than me cancelling them 

As they have done the entire time I've been here, but the company hasn't hiked my DD to this degree at any time in the past.

I understand the principle, but I don't get interest on the credit they hold for me, so I'm not going to increase that amount!!

You yourself should be able to get the £205 reduced to £184.50 instantly.

Login to your online account and go to "Adjust your Direct Debit".
Click the green "Continue" button.
Scroll down a few lines, do you see this?

If you see that then you can click on “Reduce payments now” to instantly reduce your DD to however much it says, (for you that should be 205x0.9= £184.50),and peg it there for the next 3-months.

If you don't see that, or if want a bigger reduction then you need to contact support.

PS. The DD calculator doesn’t know that you will be away for a few months, and wouldn’t take it into acount anyway.
(OVO don’t seem to trust their customers to manage their own budgets and set their own DD’s, but you can get round things like with that reduction tool or by talking to support).

Hi thanks, tried that first and it won't let me adjust it down at all....

​@Heilan_coo do you actualy see that Green “Reduce payments now” button?
If you see it then have you actually clicked on it?

If it shows that message with the “Reduce payments now” button, (and you haven’t already used it to reduce your payment from the recommended), then clicking on that green “Reduce payments now” button will reduce it instantly.*

Even when putting in an amount in the box above, or the box on the previous page, won’t let you reduce the DD payable clicking on that green button will reduce it for you to the amount stated, and will do it instantly.

*(Obviously though you can only use that button once to reduce it - unless it later shows you that the recommended DD has dropped, so you can then drop your already reduced payment by another pound or two).

​@Heilan_coo it’s a shame for you and many others what happened with the closure of the RTS signal. Unfortunately, this was an Industry decision, and was not down to OVO so, when it came to offering solutions, our hands were somewhat tied.

Regarding your Direct Debit, our computer systems are programmed to estimate future consumption on the basis that you’ll be in the property using energy. If you’re going to be away for a couple of months then we’ll have no way of knowing this without you telling us. An advisor can have this discussion with you, and ensure that your Direct Debit isn’t increased for that time. Get in touch with our Support Team and explain the property will be vacant - they should be able to put a freeze on your Direct Debit.

They did the same to me, telling me that I needed to have a full one months payment in credit at march 26

I complained, telling them that this is unreasonable as the new payment amount meant that I will have 2-3 months credit in my account by October 26

they ignored my complaint.

I am no longer an OVO customer!

Ben, I have read your replies explaining how OVO try and come up with the required DD amount.

But my experience is that this process is broken.  The future month on month figures that they used to calculate my amount were based upon an assumption that I would use 20% more electricity in the winter months than the summer months.

However, they have accumulated 3 years of prior usage to show that I do not do that.  My month on month electricity usage is flat for the whole year. 

My gas usage increase 80% in the winter months and they correctly predicted that.  But because gas is so much cheaper than electricity, that extra cost of gas was actually lower in cash terms than the erroneously predicted increase in electricity costs.

Is it any wonder that I got annoyed with them?

​@tim123 apologies you’ve had that experience.

From my own perspective, looking at my own OVO account, the Direct Debit forecast is pretty bang accurate to my usage, and is recommending I lower my Direct Debit. If your electricity forecast was incorrect, then the annual usage figure held for your electricity wouldn’t have been correct. This is something that could have been raised to be fixed when you complained - I’m sorry that this wasn’t done.

I hope you have a more positive experience with your new supplier, but by all means continue to use this Forum for any energy related queries you have, and hopefully we might see you again as a customer in future.

The DD calculation is not complicated, and it involves no prediction. There are, of course, a few assumptions, the most important one being that consumption in the next twelve months will be the same as in the previous twelve. That gives a base figure - the FAC - to work from. The total cost for the year is basically the FAC x  current unit rate + Standing charge x 365. 

The DD calculator’s Cost chart for a full year (as they used to display) simply distributes this total cost over the year in a typical manner, with lower usage in the summer and higher in the winter. This distribution hasn’t changed for me in many years*, so I doubt that it had for you. Looking at the Cost chart in November will paint a different picture from that for the whole year, because costs virtually allocated to the months left are higher than for the preceding months.   

I wonder if your claim that “month on month electricity usage is flat for the whole year” is perhaps stretching it a bit. The typical customer will naturally use more power in the winter, if only to have the lights on for longer each day. We spend more time at home in the winter, so perhaps more TV viewing hours. We wear more clothes, so probably more washing. Whether the difference is 10% or 20% or 30% makes little difference to the DD calculation.
  

*

The observed weights suggest that the typical user will consume 40% (not 20%!) more electricity in winter (1 October - 31 March) than in summer.