I have been thinking through just what OVO are doing (but not yet saying clearly).

My stab at a simple to understand explanation is as follows:

• A Fixed Term Contract will still fix your tariff for 1 year (or 2 years) from the commencement date.
  Nothing has changed there - it is still a price fix for one year or two years..
• However OVO will no longer calculate your DD payments for the same period that the tariff has beeen fixed for.
• Instead everybody's DD’s will be calculated to attain zero balance on 31st March each year, starting with 31st March 2026.
• Fixed Tariff or Standard Variable Tariff makes no difference, as things stand after this change all Direct Debits will now be calculated to attain zero balance on 31st March 2026 and then each 31st of March ongoing.

As I said above:

as that transition is being done it will cause issues for some.

All migrations/transitions to new systems are going to cause issues for some.

 

The updated help article suggests that all DD customer accounts are treated the same:

 

Easing the burden of servicing the debt of customers in arrears by increasing the payments of customers in credit. Nice for debtors, not so nice for creditors. I’m not a charity ...

Thanks @Firedog , I had already come to the same conclusion that it’s all regardless of tariff type and was editing my post as you posted yours.

The first thing I should say is that agree with @Firedog  in that I don't think this is wholly nefarious – I do however think that it is a glaring example of crass systemic incompetence and irresponsible desperation to cut costs.

Secondly, the “bug� excuse is laughable and doesn't stand up to even passing scrutiny.

The problem is that, irrespective of what OVO claim, their billing systems are fundamentally trade modules which have been adapted for retail use. As is so common in situations like that, the system was adapted for a particular set of anticipated circumstances and without the operational flexibility you'd expect in a system designed from scratch for retail billing.

Until last year, when the billing cycles were (summarily and without prior notice) all aligned to 31st March, the direct debit system was more or less compliant in that it took a rolling 12 month view when assessing monthly direct debit payments … 12 months is what is responsible because it adds a certain stability, avoids wild fluctuations and allows the customer to budget.

I mention stability here because that is what OVO's own terms and conditions peddle as the goal (I think it was @Nukecad  who was focussed on this at the time and really wasn't given the hearing he deserved).

What happened at the beginning of October last year (or whenever it was that all the billing cycles were changed) is that OVO made a huge change to the way they operate direct debits; but - through either crass incompetence or wilful negligence – chose to do it without making the requisite changes to to their systems.

Hands up, I was vocal in the defence of 31st March, because it made perfect sense in terms of customers budgeting …. I was however gullible and very wrong, because I had stupidly assumed that OVO had made the commonsensical changes to their systems, but after a few weeks of testing on my own account it became abundantly clear that this wasn't the case.

The rolling 12-month connection was lost. EVERYTHING started to revolve around 31st March, which means that the closer you get to 31st March, the more erratic and irresponsible the system's suggested direct debit payments become. Something as simple as earning a £15 reward from Power Move in February will result in your direct debit being reduced by £14 (whereas it would only be a £1 change if direct debits were responsibly assessed on a rolling 12-month basis). Accumulate all those potential unforeseeable credits (or debits) over 12 months and the changes to required direct debit between 1st April and 31st March can be huge.

The same principle applies to all other external factors such as warmer homes discounts, much warmer or colder than expected winters etc. – the closer you are to 31st March the more extreme the impact on direct debits is, because you've lost the smoothing effect of calculating direct debits responsibly over rolling 12-month period.

Come 1st April – the only time of the year in which the system is taking the responsible 12-month view – that all resets and you potentially get a sudden huge upwards adjustment to the required direct debit. You simply can't expect most customers to understand and foresee this.

12 months ago I pointed all this out to Tim and the PZH forum.

I suspect that what has happened here is that now that we are less than 6 months from 31st March, and the system is starting to become erratic again, someone with little or no operational and regulatory knowledge has come up with the bright idea that, rather than fixing the system, you can smooth out these drastic variations by quietly changing to 31st March + 1year …. and that someone (who is equally deficient in operational and regulatory knowledge) has signed off on it because it is both a cheap (ie effectively zero cost) jury-rig solution AND flatters the balance sheet.

The problem for OVO is that the system has not only become wholly irresponsible, it is self-evidently also non-compliant in terms of both Ofgem and BACS requirements – that means both a very public evisceration by Ofgem, but also the very real risk that OVO (and potentially, but unlikely, also Barclays who are their sponsoring bank) will be denied the right to operate direct debits until their systems have been fixed.

@Firedog , you are correct that 'expect' = 'required' as far as Ofgem are concerned.

After the problems a month ago I was already in dialogue with Ofgem about OVO’s direct debits before all this blew up on 1st November, so I’d already checked my facts by the time I started this thread.

 

I have posted a lengthy reply but apparently my posts are now being moderated. 

Did you compose your long reply in an external editor, then copy it in and post it?

I'm not a moderator here, but where I do mod the automatic filters will often see that as a ‘too fast, may be a spambot’ post and send it to the queue to be approved (or rejected) by a human.

Nope ... even the second short reply, with quotes and less than two lines of input text, was sent to moderation. 

Ah. sorry then but as I am sure wii you understand I don't want to say too much about how forum moderation works (we try not to give the bad guys clues).

LOL - especially as I don't know how it has been set up on this particualr forum or forum software.

 Thanks.
  

Yes, the calculator isn’t much use at that stage. However, I’ve not seen much in the way of complaints about increased DDs on this score. DD reviews are (allegedly) conducted at least quarterly, so any increase in DD that OVO suggests in March, say, could reflect a change in account behaviour since December. 
  
A suggestion or recommendation doesn’t necessarily become a requirement.
  

This again was a frequent grumble last year. If the DD had been set low because of a large credit balance the previous autumn, it would have had to rise from 1 April to the ‘standard’ level of projected annual cost/12. This isn’t totally unreasonable, and OVO would have complied with Ofgem’s and others’ urgings (neither expectations nor requirements) to reduce their holding of customer credit balances.
    

Yes to non-compliance with Ofgem’s expectation, but why should BACS or the bank involved concern themselves with a commercial arrangement in which their only role is as facilitators?

Sorry, but it rank hypocrisy to on the one hand say that the calculator isn’t much use and then go on to defend it because it isn’t always as bad as it could be because the recommendation doesn’t always become a requirement. 

The simple fact of the matter is that the calculator reflects how OVO calculate direct debits … and do in a manner that simply isn’t fit for purpose and doesn’t help to protect customers who aren’t as bright a you think you are. 

 

It is self-evidently enough of a problem that OVO tried to implement a hopelessly bodged fix by switching to 31st March + 1 year, which is causing this mess  …. and that most definitely is not reducing OVO’s holdings of credit balances. 

 

I’m not here to justify BACS rules and operating procedures - I am simply stating facts - but you are very much misunderstanding the responsibilities if you think that BACS and the banks are merely “facilitators�. 

OVO’s customers are customers of the banks, banks’ responsibilities are to their customers and banks don’t like dealing with the shit and recharges that result from an incompetent company which isn’t following the BACS rules. Those same banks also make up the majority of the guarantors os PAY.UK (who own and operate BACS) … although Barclays aren’t one of those guarantors and therefore have limited sway over BACS.

We're sorry to hear you're concerned and we can understand why you might be. Here's some more information on this, to make sure you have all the details. 

Recently, we changed our Direct Debit recommendation process. It now covers a longer period of time. This means customers on fixed tariffs will be given a monthly payment that covers your energy costs until 31 March 2026.

This is to help customers to avoid building up negative balances during the colder months and is a better estimate of the energy they’ll need. 

Here's how your monthly payment is worked out:

• Step 1: First, we estimate how much energy your home is likely to use by 31 March 2026. This includes any costs, such as standing charges and upgrades.
• Step 2: Then your current balance is factored in, to check whether your energy account is in credit or in debt. 
• Step 3: Finally, the total amount is divided by the number of payments you've got left till 31 March 2026.

This gives your monthly payment. It should mean you don't have anything to pay at the end of March 2026.

 

Still not a proper answer, @Emmanuelle_OVO.

Anyway, no matter. This incompetence really is the final straw for me and as of today I am delighted to be able to say that I am no longer a customer of OVO and have therefore signed off.

What about those not on fixed tariffs? I understand that this new arrangement applies to them, too. 
  

Unless I’ve misunderstood, there’s no change in the way customers’ future consumption is estimated - it’s still just the FAC each year. Not even OVO can foresee what future consumption might be some time next year, so any ‘better estimate’ made today for the period 1 April 2025 - 31 March 2026 is pure speculation.

With this arrangement, a customer currently in debt would risk having a negative balance for the rest of this winter and the whole of the next. OK, it’s not necessarily ‘building up’, but even so it’s difficult to see how this can be reconciled with the Core Terms’ requirement for Direct Debit customers: “you agree that … you’ll keep your energy account in credit by paying for the supply in advance�.

In an earlier attempt to justify this change, we heard that “This will … improve the experience when customers move between tariffs.� In what way will the experience be better if a customer currently in debt is still in debt at the end of a fixed-price term? The main difference I see is that any attempt to switch supplier at that stage - a common scenario - will now be blocked. That’s hardly a better experience.

Please try and find out the actual reasoning behind this fundamental change.

 

So the rationale for the change is that it better prepares customers for both this AND next winter. Customers in credit appear to need to pay more so that customers with a debit can spead the payments over a longer period. Has anyone worked out what this means for customers?

So in the following table I have used my monthly charges and calculated the repayments based on a variety of credit/debit balances for 5 month (March 2025), 12 month and 17 month (March 2026) payment periods.

 

In (almost) every scenario the lowest monthly payment is over 12 months. This reflect what I would actually use over a full 12 month period (£119 per month). The suggestion that by extending the payback period to 17 months eases the payments for customers in debit only works (for me) if I am more than £600 in debit.

When we get to April 2025 will the period then skip to March 2027? Will I always be paying to cover two winters?? Isn't it sensible to stick to a rolling 12 month period where payments should track usage and NOT an estimate of this AND next winter?

That’s an interesting question.

I had assumed that this was a transitional measure and that it would be after March 2026 that it would then revert to 12 months again, ie March 2027.

But nothing that I can find actually says that.

I just don’t understand the rationale for this change. It might make sense for those on the SVT if you accept the principle of customers in credit subsidising those in debt.

For those on a fixed plan, and given an accurate FAC, there can be no justification for forcing a customer currently in credit to have a positive balance at the end of term. Once upon a time, the recommended (and often imposed) DD was reckoned to bring the account to zero balance at contract expiry. Even if I were to reduce my DD to the current recommended amount, I should still be in credit to the tune of 6.5 DDs when the plan comes to an end. How can this be right, @Emmanuelle_OVO?

Has anybody else been regularly notified by OVO to increase one's direct debit amount - despite having consistently been in credit by hundreds of pounds for the past couple of years?!!!

As long as I have at least 3 months worth of credit left in my account I should not be obliged to increase my monthly payments.

Sure - it's quite interesting/amusing to read that I shall be in debt to OVO to the tune of approx. £160 in 2026!, if I don't pay them a higher monthly direct debit amount now. 

But: as long as my (for me!) comfortable credit isn't depleted or reduced to £50, I will not up my outgoings!

Besides: who's to say that our crippling energy + standing charges might not miraculously come down by 50% in April '25? (Here's hoping!!!)

You are not the first to notice!

Take a look at

Unexplained change to direct debits | The OVO Forum

 

How are you being notified? And how regularly?

It’s a bit surprising that your balance is forecast to be negative in March 2026. This shouldn’t be possible if, as you say, you’re ‘consistently in credit’. 

If you look at the Direct Debit calculator, you’ll see that at some stage your account would dip into debt with the current DD amount. How reasonable this may be rather depends on whether you’re on a fixed-rate or variable tariff. If you’re on a fixed-rate tariff, the point where your balance crosses the line should not be before the contract’s end date. On a variable tariff, the account should remain in credit until a year hence. Apart from that, your forecast balance at the end of September should be high enough to see you through the following winter; if it isn’t, the recommendation to increase the DD is probably justified. 
  

Not likely, I’m afraid. The ones with the biggest crystal balls* are currently saying that next April’s price cap will probably be a bit higher than today’s, but by less than 1%. OVO’s DD calculator takes no account of predicted price changes. If there’s any change to standing charges, it’s not likely to take effect until October next year - and of course there’s nothing to say whether any change that does happen will be to your advantage.
  

*   

Price cap predictions and insights | EDF
Price Cap Predictions and Changes - British Gas

 

Hey @Sanka14 

Sorry for the issues you’re having

Like Firedog I’m surprised you’re being notified to increase your direct debit if you’re consistently in credit. Have your rates recently increased? Is there any out of line readings in your meter reading history? Are we in regular communications with your smart meter or getting reguar readings from you (if you have a traditional meter)?

 

 

When you use the direct debit calculator does it make more sense?

 

 

@Emmanuelle_OVO I have the same notification when accessing my account from computer. My account is always in credit. My credit is enough to cover six month payments. I have never delayed any payment ever. Despite all of this my account says:

“You’re paying £tan amount] on the Âdate] of each month.

Your balance is set to be -Âan amount] by 31 March 2026. Your minimum monthly payment is £pan amount].â€�

Just why? Why I should I think about the March 2026 if we are in the 2024 right now? Too alarmy for no reason.

Not long ago I had issues with writing a comment from my smartphone. Later on the day, I was back to my computer and everything was fine. I’m not a moderator here too, so, just guessing. Was your comment sent from any device which is not computer? 

I’m not on fixed tariff and new arrangement applies to me too. 

Yes, I know. I only wrote that because of the fifth sentence here: 

 

Hey @costeek 

 

I understand your frustration, 

 

It’s hard for me to comment on account specific scenarios without more information. I’m surprised you’re being notified to increase your direct debit if you’re consistently in credit. Have your rates recently increased? Is there any out of line readings in your meter reading history? Are we in regular communications with your smart meter or getting regular readings from you (if you have a traditional meter)?