I'm on a fixed plan - Will the price cap increase affect my direct debit amount?

For me at least the website says a recommendation is not currently available. However on the app for me there is a recommended direct debit which appears in line with the new rates. 

https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

So looks like work in progress for me at least

Now that the government has set the price cap, will people not making payment by DD be charged more.

OVO has paused all Direct Debit reviews for now while they work things out. As far as I’m aware, you can disregard any previous calculations that factored in the legacy price cap. OVO’s billing platform will regenerate everything once the new data has been programmed in and you’ll get an update soon.

thank you

I had a message on  my online account to reduce my DD down from 220 to 191, this may have been done as submitting daily gas readings. But my question is will people still pay extra if they do not pay by DD

It’s possible that might be the case - suppliers will need to cover their extra costs after all. Direct Debits can be fully automated all the way through the process. All other methods require some form of manual action.

Whether you are on payment by DD, prepayment meter or pay after the event you will benefit from the EPG announcement last week.

We don’t have the full details of the capped rates yet, but normally DD is the cheapest method, prepayment is more expensive by Circa £50 per annum and paying after the event (standard credit) about £200 more.

Those who think that not paying by fixed DD will give them more control over their finances pay handsomely for that.  Some other suppliers - like Eon Next - also allow customers to pay after the event by DD and get the lowest tariff.  OVO doesn’t allow that option.  Customers do have the option to switch suppliers, prices will be virtually the same for equivalent payment types at all suppliers for the next 2 years.  In Normal times suppliers want to keep customers - these though are not normal times.

This is what 

OFGEM said in their latest price cap announcement:

“Customers who pay by standard credit (cash or cheque) pay an additional £215 based on the higher cost for energy companies to serve them. The 24 million households protected by the price cap includes around 4.5 million prepayment meter customers. These customers pay an additional £59 compared to those on direct debit, which also reflects the higher cost for energy companies to serve them. “

That price cap announcement has been overtaken by events and the EPG is circa 30% lower than the OFGEM price cap.  The exact relationship between the 3 payment methods is currently uncertain, partly because the most recent standing charges from OFGEM are expected to stay the same - only the unit prices will be lower.

Hi,

I am currently on the Better smart tariff and have a fixed contract until March 2023 but OVO have tried to put my Direct Debit up from £178 to £368 offering an excuse that the cap is rising. 

Can anyone confirm that the Better Smart is a fixed rate tariff and is not affected by the cap rise until after March 2023?

Hi @coco34ymail.com and thanks for posting this question. 

We need to separate out the Direct Debit review from any price change. First, let’s outline what might’ve happened with your prices:

If your fixed prices from your ‘Better Smart plan’ are higher than the Energy Price Guarantee cap, OVO will reach out to you and advise about a move to the variable rate, Simpler. This will mean lower prices. If the ‘Better Smart plan’ has lower rates than the cap, nothing will change  for you, price wise. 

A direct debit review, which factors in prices and project usage, will aim to get you to £0 by the end of your contract end date if you’re on a fixed plan, or £0 after 12 months if you’re on Simpler. 

With that in mind, perhaps you’ve been moved to Simpler to ensure cheaper prices, and now the target end date has moved forward from March to October, resulting in a higher recommended payment amount. You’re able to adjust this yourself online, and if the recommended amount is unaffordable, our Collections team can discuss with you an mount that works: 0800 0699 831. My advice would be to wait until after ‘meter reading day’ as we’re seeing very large contact volumes. 

Hope this helps,
Tim

I have always been on The Better fixed tariff. I can see that you are offering me me advice to move to a variable rate but in the long run works out better for me to stay on Better fixed tariff but bad for OVO as the price cap covers our fixed term.

My account is always in credit or at £0 when the new billing period starts so the £190 increase in my direct debit excuse doesn’t wash.​​​​​​

OVO have used the Russia Ukraine conflict to increase prices to an unaffordable platform and have been helped by OFGEM and the government who all in turn get a lot more revenue from this so its a win win situation for them. 

1. I am on a fixed rate term until March 2023 and in a contract
2. You are trying to force my direct Debit up to over double but….
3. I’m on the fixed rate term and keep my account in credit or to £0 before the next billing period starts.

Yes I will pay slightly more now Autumn and winter are on the way but not from £178 to £368 unless you are putting prices up to over the CAP which OFGEM said you cannot.

Something has to give and Tim’s advice is to move to an open field to be shot at from OVO with very high Gas prices which has been caused by the Russia and Ukraine conflict…...Apparently. they may supply the gas but i’m sure they don’t supply the electric which is being hiked up over 80%.

OVO have apologised for there Error and said this shouldn’t have happened,

I will manage my account month to month and use a log burning fire so i keep my gas usage down.

Why would you advise me to gamble from a fixed rate to a rate which hasn’t been announced yet? I have a wife and 3 kids and our family household income is just £30000 with no benefits so we need to be tighter than an ants bumhole.