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OVO Interest Rewards - how is it calculated?

  • 12 November 2017
  • 18 replies
  • 1476 views



Please can someone tell me if I have interpreted the reward scheme correctly? In year one OVO will pay 3% of the amount in credit up to a maximum of 3% of £1000. i.e. £30. Is this correct? (If it is it means OVO are paying a lot more interest than the high street banks)
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Best answer by Mw2870 13 November 2017, 23:38

Yes!

The OVO Interest Reward is calculated monthly as 3% per year, using the amount of
any credit left in your account after you’ve paid your bill, and the number of days
you are in credit in the relevant month.

The credit amount used to calculate your OVO Interest Reward is capped at 12
times the amount of your current direct debit amount. So yes, 3% on £1000 if your DD is at least £83 a month.

Yes, better than banks, and it’s classed as a discount so no tax!

Remember, as per your contact:
You must not make payments into your account just to receive the OVO Interest Reward.

If OVO think you’re making payments into your account just to receive the OVO
Interest Reward, they may refund the extra amounts to you and may withhold
payment of the OVO Interest Reward on those amounts.
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18 replies

Userlevel 5
Badge +2
Yes!

The OVO Interest Reward is calculated monthly as 3% per year, using the amount of
any credit left in your account after you’ve paid your bill, and the number of days
you are in credit in the relevant month.

The credit amount used to calculate your OVO Interest Reward is capped at 12
times the amount of your current direct debit amount. So yes, 3% on £1000 if your DD is at least £83 a month.

Yes, better than banks, and it’s classed as a discount so no tax!

Remember, as per your contact:
You must not make payments into your account just to receive the OVO Interest Reward.

If OVO think you’re making payments into your account just to receive the OVO
Interest Reward, they may refund the extra amounts to you and may withhold
payment of the OVO Interest Reward on those amounts.
Userlevel 2
Hi,

I'm trying to understand how you calculate the interest on my account when I'm in credit.

To take a specific example:

My 2nd Jan statement (for 1-31 Dec 2017) shows that I was £12.11 in credit on 1st Dec, and the 4% interest has been calculated on that (£0.05). However, my 1st Dec statement doesn't include the £41.00 DD that was taken on 1st Dec, and was credited to my account on 2nd Dec.

So I was actually £53.11 in credit from 2nd - 31st December (and this was shown on the MyOvo home page), but the interest for December was calculated on the balance at 1st Dec as though that was the figure for the whole month.

If I am right, I have effectively been "cheated" of £41 x (29/31) x 0.04 = £1.53 over the whole year. If I am wrong, where is my misunderstanding, please?

If the calculation is always just based on the credit balance on the statement date, can I change my DD date to a few days before my monthly statement, so that my statement accurately reflects my true balance? (I'm an online-only customer, and can't see any way of doing so).

Richard.
Hey @rgphilpott

The interest reward is calculated on the balance brought forward for your last statement.

Interest reward = number of days in the bill period (divided by) 365 (Times by) 3% (Times by) Balance brought forward.

This means that changing your Direct Debit date wouldn't have an affect on how it's calculated.

Hope this helps,
Emma
Userlevel 2
Thanks, but I think you're wrong. Even if a DD on (say) the 25th isn't included in the balance shown on the subsequent statement (on the 1st), from the second month with the new DD date my b/f balance should consistently be higher than it is now, by the value of the DD.

I've changed my DD date to the 25th anyway, so I'll know for sure in a couple of months ... :-)

Cheers,

Richard.
How is the interest reward calculated, please? It looks incorrect to me!
Userlevel 5
We already had a topic on this, @Cbee, so I moved your query here.

Check out the best answer for more info on this! 🙂
Userlevel 2
I think you will find that the REWARD is subject to VAT whereas the DISCOUNT was not.
This is obvious from my account details as the reward for 3 months was £14.29 not £15.
Userlevel 6
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That's not correct, @JimTraynor. All charges are listed on your bill summary without VAT included initially, then VAT is added to all transactions (whether positive or negative). So to begin with your SSR will be listed as £14.29 per quarter, then with VAT added you'll get the full £15.

Thanks
Userlevel 2
Nancy_OVO
Thanks for your answer.
I'm afraid I could not follow your argument so I looked closely at my statements both before and after the October change. I now see that the October change did not cause the £5 discount to be reduced. It has always been reduced by OVO's strange method of calculating the charges to be applied. I have shown a statement from before and one from after October. I have also shown the very simple way I believe the calculations should be done. Please advise me of why my calculations are wrong. In any case it is certainly true that giving the discount every 3 months certainly loses the value to good customers and gives OVO a financial gain.


Simple calculation OVO calculations



Balance brought forward £158.70 £158.70

Electricity charge £13.63 £13.63
Gas charge £25.28 £25.28
Total charge £38.91 £38.91
OVO Interest reward 5% £0.66 £0.68
Online discount £5.00 £4.86
subtotal £5.66 £5.54
Total charges before VAT at 5% £33.25 £33.37
VAT £1.66 £1.67
Total new charges £34.91 £35.04
New Balance £123.79 £123.66


Balance brought forward £267.66 £267.66
Electricity charge £78.37 £78.37
Gas charge £39.36 £39.36
Total charge £117.73 £117.73
OVO Interest reward 5% £1.12 £1.14
Online discount £15.00 £14.29
subtotal £16.12 £15.43
Total charges before VAT at 5% £101.61 £102.30
VAT £5.08 £5.12
Total new charges £106.70 £107.42
DD Receipt £170.00 £170.00
New Balance £330.96 £330.25
Userlevel 2
I'm afraid the figures above have lost the layout which was shown just before I sent them. If the second price in each row is moved away and lined up' they will be the OVO calculation and the first prices can be lined up and taken as my calculation.
Yeah I'm not so sure about mine either!

My interest reward has ticked up to 4% now. So here's some maths:

My DD is £85 so I'm definitely above the DD x 12 rule
My balance before statement was £664.01
Statement costed £41.19 (balance now £622.82)
DD paid in £85 two days after (balance now £707.82)

So, based on this thread, the interest reward should be £664.01 x 0.04 (4%) = £26.56
Interest is calculated on a per-year basis, not per month, so £26.56 / 12 = £2.21
But on my statement, I see interest reward as £1.97

Is my maths not correct?
Userlevel 5
Here's how we calculate the interest reward, @DanTheBrit.

Does this help? :)

Userlevel 2
Taking the lowest figure DAN mentions (662.82) and assuming a 30 day period (I suspect he is referring to the June- July statement:
30/365*0.04*662.82 = £2.18
He says OVO quoted him £1.97 ??????????????
If OVO used 3% by mistake the outcome would be £1.63 so I cannot see where the OVO figure comes from.
Userlevel 6
Badge
We'd add 5% VAT onto your interest reward too (well, everything is calculated net and then 5% applied to the whole bill). Could that be where the different is coming from?
Userlevel 2
Nancy.
Having seen the entry by Dan I became interested in checking my own figures which I shamefully admit I had not done in the past as I assumed that something like this would be calculated correctly from a simple formula. I took all my figures for the last year and calculated what the payment would be when the calculation was based on, the incoming credit balance, the final balance and on the average of the two.
I compared this with the actual payments from OVO and found that the yearly payment came very close to the calculation based on the incoming balance.
However the payment did not match the calculation in any single month. The payments were sometimes higher and sometimes lower than the calculation (as much as 9p (a significant percentage) in one case).
I think anyone who understands how formulae can be used to service a system like this (I have a degree in mathematics) will agree that variations like this should not happen.
I think that OVO should be very willing to advise us of how they calculate the payments and explain why they are so inconsistent.
Your suggestion the the 5% VAT could be the answer is definitely not correct.
The yearly error in my account is so small that I would not be worried about it but I am worried about how the results can vary so much month to month and would like to hear what causes this.
If this value is being incorrectly calculated, why should we believe any other figures OVO supply?
Userlevel 5
The team would need to look into this, @JimTraynor, get in touch with us over Facebook or Twitter with your name, DoB and account number.

Don't worry if you don't use social media, you can email the team on hello@ovoenergy.com.
Userlevel 2
This is probably the wrong place to ask this question, but I hope it can be passed to the correct person.
Can you give me any info,especially (but not exclusively) with regards to pricing (even if only an estimate), about the new OVO and SUNAMP Heat battery offering?
Jim
Userlevel 5
Badge
I'll do my best to find out some info and get back to you, @JimTraynor, in the meantime there is some handy info here.

Cheers!

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