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Rank 1
Lorna C
Rank 1
June 16, 2025
Solved

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

  • June 16, 2025
  • 133 replies
  • 4154 views

Ovo want to increase by direct debits so that I am one month in credit by the end of March next year. I queried this with them as previously the payments were worked out so that the amount was £0 at the end of the 12 month period. They’ve said they have changed their DDM calculations so I have to accept this. I think this is v unfair. Is there any way round this? 

Best answer by Emmanuelle_OVO

Updated on the 29/08/25 by Emmanuelle_OVO:

Hey ​@Lorna C,

We have made the change to build one month's usage credit by the end of the winter period on our customers accounts. This credit will help to cover any changes to your energy usage or costs throughout the year leading to a smoother payment journey. Your Direct Debit is managed to ensure that you do not build too much credit on your account and also ensures your account does not fall into arrears should anything change with your usage. If you do build more credit on your account than is needed, we will recommend you reduce your payments or alternatively, you can request a refund at any time Our recommended Direct Debit amount is a suggested amount to ensure you pay for your predicted energy and don't end up with any debt or too much credit by the end of the Winter period. Your energy costs may go up or down throughout the year and we want to support you with those changes. Paying by Direct Debit helps to spread those costs so you don't end up with large bills to pay, and paying by Direct Debit is one of the cheapest ways to pay. 

 

How we work out your Direct Debit amount

 

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.

 

Your Direct Debit payment amount will be regularly reviewed to make sure it still covers your home’s energy use.

 

Why is my Direct Debit increasing when my balance is in credit?

 

It’s normal for a credit balance to build up in your energy account over summer, when energy use is usually lower. This credit can help pay for your energy in winter, when most homes use more. It helps you spread your energy costs over time. Even if your energy account is in credit, sometimes your Direct Debit payments still need to increase.

 

This could be the case if we’ve worked out that your OVO account is likely to have a debt balance long term – based on how much energy your home is predicted to use. 

 

You can always choose to get a credit refund if you prefer. Request one at any time in your online account, in our app, or over the phone. You just need to leave credit in there for 1 month’s payment. This is in line with our refund policy.
 

 

133 replies

Show previous replies
D
Rank 2
DavidWSR
Rank 2
July 26, 2026

As Firedog points out paying by a non Direct Debit method does cost a little bit more. However, I do make savings during the summer months allowing me to make some interest on that in the bank or building society ready for the higher bills in the winter.

Perhaps another advantage is calculating payments is not required as a pay bill in full on demand customer. I just pay each month what is due. SSE used to and I believe Octopus Energy do allow a variable Direct Debit payment of the full bill monthly. There will be a reason OVO and some other energy providers do not allow this method of payment which is used by other utilities such as telecoms providers. Not sure what this reason is.

The VAT rate is due to change from 5% to 0% in October so you may wish to factor this into the calculation.  

    B
    Rank 12
    Bendog
    Rank 12
    July 27, 2026

    That’s a good question George, I look forward to seeing any answers.

    Also, I thought the point of being on a fixed tariff, as I am, is to protect me from prices changing in the year. My direct debit has gone up by £17/month which is a huge amount for me living on my own.

    Jasmin

    If you are on a “fixed tariff”, you are protected from price changes, BUT that just fixes the amount that you pay per kWh and the amount you pay for your daily standing charge, it does not fix the Direct Debit which is determined by your actual usage. Direct Debits are reviewed, regularly, by OVO and they have a responsibility to ensure that customers do not run the risk of debt. 

    However, if you think that this increase is incorrect, it is worth contacting OVO. I never phone OVO and always use the Messenger facility on Facebook.  Whenever I have been faced with this situation, I send evidence showing why I think that their amount is incorrect. 

    First of all, I work out, using the Future annual consumption (found on your My Plan page when you LOG IN to your account) what a reasonable estimate for my annual costs will be. This is what mine would look like at the moment.

    If I divide my total by 12, this gives £100.71 as a reasonable Direct Debit.

    However, OVO expect you to have a credit of, at least, one month’s DD payment in your account AT ALL TIMES. So for me, I would have to add this £100.71 to my Total giving  1309. 28. I then have to divide that total by 12. This would give £109.11. It is likely that OVO would suggest £110 for me.

    These calculations assume no credit (which I would subtract from the Total figure) or debt (which I would add to the Total figure) BEFORE working out a sensible DD amount. 

      Firedog
      Super User
      FiredogSuper User
      Super User
      July 28, 2026

      As Firedog points out paying by a non Direct Debit method does cost a little bit more.
        

      The term I used was ‘significantly more’. Of course, what is significant for one may be insignificant for another, and one man’s little bit might cause another to choke. I just did a back-of-an-envelope calculation to see how big the difference is in fact. Using the GB average figures for single-rate electricity and gas for this quarter and the current typical usage values (electricity 2700 and gas 11500 kWh/year), this was the result:
       

      Payment

      method
      Fuel      		 Unit

      rate      		 Standing

      charge      		 Fuel

      cost
      SC
      Total      		 Diff.  

      OD - DD
      Payment

      method
      Fuel
      p/kWh
      p/kWh
      £/year
      £/year
      £/year
      £/year
      Direct

      Debit      		 Elec 26.11 57.19 704 209 913 70
        Gas 7.33 29.04 843 106 949 72
        Total     1548 315 1863 142
      On

      Demand      		 Elec 27.56 65.74 744 240 984  
        Gas 7.71 36.69 887 134 1021  
        Total     1631 374 2005  

      Apologies for any mistakes. The Direct Debit total of totals comes to £1862(.66), widely reported as the price cap for the current quarter.

      These sums show that it would cost the typical dual-fuel customer £142 annually - almost £12 a month - for the privilege (some would say ‘inconvenience’) of paying on receipt of bill. 

      Noel | I have no official status; I'm just a volunteer who comes here to help other customers. My gear: Aclara SGM 1416-B Electricity-only E7 meter; Chameleon IHD3-PPMID-AAA | It may look as if I know what I’m talking about, but don’t let that fool you. |
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        OVO Energy Ltd, Floor 5, Crescent, Temple Back, Redcliffe, BS1 6EZ, (Company no. 06890795) registered in England and Wales.

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        OVO (S) Gas Limited is part of OVO Group Ltd