Good question! The answer is ‘nobody knows’. This new policy was introduced a few weeks ago, following on from other related policy changes at this time of year last year and the year before.
The idea of calculating Direct Debits (DD) to end a contract with zero balance was changed to aiming for zero balance at the end of the winter semester, defined as 31 March, when DD customers’ balances are usually at their lowest. There is an active campaign by Ofgem to bring customer debt down from its appalling level of £4.4Bn at 30 June 2025.
OVO is probably thinking that by persuading DD customers to maintain a credit balance of a month’s costs, there is a lesser chance of default should a customer suddenly find himself in financial straits. Many customers have done this anyway off their own back, but this is the first time the practice has been mandated. Gone are the days when a customer could allow his account to wander into debt in the middle of winter, confident that it would all come right when warmer weather returned.
Last year, we saw in early November that the reference date - next 31 March - was pushed out to the next 31 March after that. This was good news for customers in debt, because all at once they were given an extra year to pay off the deficit.
There are many who would say that keeping a month or two’s buffer as a credit balance on the account is just common prudence.
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. |
