Why is the suggested Direct Debit amount on a Fixed rate plan substantially higher than my variable monthly bills?

  • 15 September 2021
  • 5 replies

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I’ve only been with OVO for 6. Months and I am comparing my monthly bills with the amount being recommended by the fixed rate plan, however the fixed rate is some 30% higher than my variable. What happens to the amount I’ve overpaid each month?



Best answer by Blastoise186 15 September 2021, 10:23

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Updated on 03/05/22 by Jess_OVO


Great question to ask about how our Direct Debit review process works if you’re on our variable Simpler Energy plan.

We recommend setting up a Direct Debit to pay for your energy, this allows you to spread out the cost of the energy you use more evenly throughout the year. In order to calculate an appropriate level for your monthly payment amount, we take into account the current balance on your account, your projected energy usage and your current unit rates and standing charges. We aim to set your Direct Debit to a level which would leave you with a zero balance on the 12 month anniversary of you starting your Simpler Energy plan.

As you’ve noticed by checking your recent monthly summaries, the actual energy you use each month does vary, with most households using more energy in winter and less over summer. The Direct Debit should be set at a point which would see you building up a credit on your account during summer to cover your higher winter costs. It’s worth bearing in mind that any change to your projected usage (ie you use more energy than we expect) or your energy prices will affect your Direct Debit amount. On the Simpler Energy plan your unit rates and standing charges aren’t fixed but are protected by Ofgem’s Price Cap which you can read more about here.

We’d recommend keeping an eye on the fixed plans available via the ‘Plan’ page of your online account or OVO app (download for Android or iOS). As the unit rates and standing charges on these plans are guaranteed for the length of the contract they may make it easier to anticipate your future energy costs.

We appreciate the concerns that higher energy costs are causing so have put together more advice and links to extra support here.


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Apologies if this has already been asked. 

It is about the Direct Debit Calculator when on a Fixed Rate tariff that is about half way through its 12month term. 

When looking ahead 12 months on the Direct Debit calculator, what unit rates and standing charge rates is the calculator using once the fixed rate has expired ? Is it using the current standard variable rate from OVO after the fixed rates have expired? This would seem consistent with the price comparison websites i have looked at perhaps? 

The ovo website may explain this. I may have just missed the wording. 


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I think that partially depends on the filters you set when you look at the graphs. It does seem to primarily use the rates that are currently active on your account right now though, so I always find the best thing to do is set the filter to End of Contract so that it gives a more accurate and realistic picture of what’s probably going to happen.

The calculator can’t know in advance what you’re planning to do once the fixed term contract ends and it also can’t foresee the future rates before they become available. :)

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Fair comment. 

I personally think it would be better if the calculator showed what would happen if i did nothing and the default action occurred which is I would be put on the standard ovo tariff.

Especially given the rising prices we seem to be experiencing and the number of queries from customers that ovo are getting on this forum and elsewhere (as are other suppliers) about price transparency and price increases. 

It could also do with some wording that says how the calculator worked as it is not clear at the moment. 

This is how the switching services like Uswitch are calculating switch saving, by using the standard do nothing rates to calculate an estimated cost over 12 months if you did nothing. 

Of course many would switch at the end of their contract but i think the default current standard rate is better than using rates that are no longer available. 

It may stop a few of the surprises customers are experiencing. It is not perfect i admit, but i think it would be better and more consistent.