MSE weekly email
FREE weekly MoneySaving email
For all the latest deals, guides and loopholes simply sign up today – it's spam-free!
How energy suppliers set direct debits
Updated 19 January 2023
You have a right to a fair direct debit, this is enshrined under energy regulator Ofgem's licence conditions. Firms must set it based on the best available information. Yet many people often, though not always rightly, feel they are being hard done by, so how do firms actually decide what you'll pay?
This has always been shrouded in some secrecy – at what point is a price change included, can they include predicted future hikes and more. Yet in July last year, Martin and the Ovo boss called an energy summit, gathering together the chief executives of the big firms. One of the resolutions of that meeting was they agreed to be open about how they decide to apply the rules. And this guide is the result of that co-operation.
There are big differences between firms, including how frequently payments are reassessed, how they factor in price changes, and how they're applying the £400 Government rebate, which started in October.
By doing regular meter readings or having a smart meter that does it for you will help get your direct debit at the right level. But if you think your energy direct debit is too high, see our guide on your direct debits rights for what you can do about it.
MSE weekly email
FREE weekly MoneySaving email
For all the latest on the energy crisis, simply sign up today!
British Gas
British Gas says it only does one or two direct debit reviews a year – you can find out which if you have an online account. These do NOT coincide with it changing prices. So any price change won't necessarily mean your direct debit rises.
Instead, it looks at its current announced prices once they're in its system at the moment you have your review, and calculates based on those and only those (not any predictions).
It says it takes this approach to stop direct debits from constantly changing, but the risk here of course is if prices rise, and you're not due a direct debit review for months, your next increase could be far higher because you're having to play catch-up. That's why, while it may leave a sour taste in the mouth, when it prompts you to review and increase your direct debit after a price rise – you may want to say 'yes'.
Full info below, or you can see British Gas's explanation of how it sets direct debits.
British Gas's direct debit rules
| How are direct debits (DDs) calculated? | Estimated annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Once or twice a year, around the year or six-monthly anniversary of your payment plan starting. Check your next review by 'view payment plan' online. |
| When are price changes factored in? | It only changes DDs at the time of your review, based on its OWN announced prices at that time, once they're in its system.
It will ask you if you want to amend your DD when it updates its prices.
It has told us it has now contacted all customers to let them know when their next reassessment is due. If you're worried yours is too low, you can amend it, though British Gas said it recommends waiting for your reassessment, and to ensure you give regular accurate meter readings in the meantime. |
| Can you adjust your direct debit? | You can increase your payments, or make a one-off payment to clear debt, at any time through your online account or by contacting British Gas. However, you can only lower it to a recommended amount if it thinks you're paying too much after a review. Not happy? See how to challenge it. |
| Will DDs be adjusted for the £400 support payment from October? | No, it'll be a monthly refund paid into your bank (of £66 or £67) within about three working days of your DD being taken each month from Oct to Mar. If your direct debit is less than £67, it can't refund you more than you've paid. The full amount of your DD will be refunded into your bank account, with the remainder added to your energy account as credit. |
| How is debt or credit factored in? | If you're in credit at the end of your 'plan year', it'll reduce your DD. If you're in debt at the end of your 'plan year', it'll increase your DD to pay this off over the year. |
| How much notice is given for any change in DD payments? | Ten working days. |
| If you're in credit, can you request a refund? | Yes, you can contact the firm and ask. There's no minimum, though it may ask for a meter reading first to check you actually are in credit. |
Correct as of January 2023.
Bulb
Bulb reviews direct debits at least twice a year, and will always review them when it has announced new prices.
Full info below, or you can see Bulb's explanation on how it sets direct debits.
Bulb's direct debit rules
| How are direct debits (DDs) calculated? | Estimated annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Minimum of twice a year, and when prices change. You can ask Bulb when your next review is scheduled for (it depends on when you last had a review and when you joined). |
| When are price changes factored in? | Once Bulb has confirmed its new rates after a price change, it will review your payment and factor in the new costs. |
| Can you adjust your direct debit? | Yes. You can manage the amount you pay in the 'Payment settings' area of your online account, or contact it to make changes. We're just checking on what the limits are. Not happy? See how to challenge it. |
| Will DDs be adjusted for the £400 support payment from October? | Yes, it will reduce your monthly payment by £66 or £67 from Oct to Mar.
If your monthly payment is less than £66/£67, you'll make no payment, with the remainder added to your energy account as credit. |
| How is debt or credit factored in? | If there's debt on the account, it'll spread the cost of paying it back over 12 months. If there's credit on the account, it'll suggest a lower payment amount that will factor in using up the credit balance over time. |
How much notice is given for any change in DD payments? |
At least five working days. |
| If you're in credit, can you request a refund? | Yes, as long as you have at least one month's payment as credit on your account and give a meter reading. |
Correct as of January 2023.
E.on Energy & E.on Next
E.on reviews direct debits every three months, and will always review them when it has confirmed a price change.
Full info below, or you can see E.on's explanation of how it sets direct debits.
E.on Energy's direct debit rules
| How are direct debits (DDs) calculated? | Estimated annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Every three months, and when prices change. |
| When are price changes factored in? | Once E.on has confirmed its new rates after a price change, it will review your DD and factor in the new costs. |
| Can you adjust your direct debit? | You can increase your payments, or make a one-off payment to clear debt, at any time in your online account or by contacting E.on. However, if you think your DD is too high, you'll need to contact the firm. Not happy? See how to challenge it. |
| Will DDs be adjusted for the £400 support payment from October? | Yes, it will reduce your monthly payment by £66 or £67 from Oct to Mar. We're just checking what'll happen if your DD is under this limit. |
| How are debt or credit factored in? | Credit and debt are factored into your expected annual costs over the next 12 months – by adding or subtracting the amount to/from your annual costs, then dividing by 12 to get the level of your DD. |
| How much notice is given for any change in DD payments? | Minimum 14 days. |
| If you're in credit, can you request a refund? | Yes, you can contact the firm to ask. It may ask for a meter reading first. |
Correct as of January 2023.
EDF Energy
EDF says it only reviews direct debits every six months – you can find out when you're due a review in your online account. These do NOT coincide with it changing prices. So any price change won't necessarily mean your direct debit rises.
Instead, it looks at its current announced prices once they're in its system at the moment you have your review, and calculates based on those and only those (not any predictions).
The risk here of course is if prices rise, and you're not due a direct debit review for months, when that does happen, it could be far higher because you're having to play catch-up. That's why, while it may leave a sour taste in the mouth, when it contacts you once it has updated prices to ask if you want to increase your direct debit – which it says it will do – you may want to say 'yes'.
Full info below, or you can see EDF's explanation of how it sets direct debits.
EDF Energy's direct debit rules
| How are direct debits (DDs) calculated? | Estimated annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Every six months from when your payment plan started. Check for the date of your next review in your online account. |
| When are price changes factored in? | EDF changes direct debits at the time of your review, based on your estimated energy usage, the present prices that you're paying and any known future prices, such as announced price cap changes. |
| Can you adjust your direct debit? | Yes, you can change your payment in your online account through the 'My Direct Debit' option. Or you can contact EDF and ask. We're just confirming what the limits are. Not happy? See how to challenge it. |
| Will DDs be adjusted for the £400 support payment from October? | No, it'll be a monthly refund paid into your bank (of £66 or £67) within five working days of your monthly DD being taken from Oct to Mar. |
| How is debt or credit factored in? | If you're in credit at your review, it will be used to reduce your DD or will be refunded if it's over a certain amount (we're checking how much).
If you're in debt, EDF will increase your monthly payments over the next year. If it's over a certain value (we're checking how much), it will request the debt is paid in full. |
| How much notice is given for any change in DD payments? | Minimum 14 days. |
| If you're in credit, can you request a refund? | Yes, if you've recently been billed based on a meter reading and your DD is enough to cover future energy costs (we're checking how it calculates these costs), you can request a refund. |
Correct as of January 2023.
Octopus Energy
Octopus Energy says it reviews direct debits constantly, so you'll likely see your direct debit change in the coming days.
Full info below, or you can see Octopus's explanation on how it sets direct debits.
Octopus Energy's direct debit rules
| How are direct debits (DDs) calculated? | Estimated annual costs divided by 12, with seasonal use factored in. It aims to make all accounts have roughly a month's DD in credit by the end of April. |
| How often are they reviewed and when? | Constantly – it continually reviews DDs in the background to ensure payments are on track. |
| When are price changes factored in? | Once Octopus has confirmed its new rates after a price change, it will factor in the new costs.
|
| Can you adjust your direct debit? | Yes, you can change your payment amount in your online account or by contacting the firm. It asks you to speak to it first if you want to reduce your payment, but your account is in debt. Not happy? See how to challenge it. |
| Will DDs be adjusted for the £400 support payment from October? | Yes, it will reduce your monthly payment by £66 or £67 from Oct to Mar. |
| How is debt or credit factored in? | When your payment is reviewed, Octopus adjusts how much you pay – factoring in credit and debt – with the aim of you having roughly one month's credit by the end of April. |
| How much notice is given for any change in direct debit? | Minimum 10 working days. |
| If you're in credit, can you request a refund? | You can request a refund at any time, but you need to provide a meter reading, or have a functioning smart meter, so it can check the refund won't leave you likely to get into significant debt on your account. |
Correct as of January 2023.
Ovo Energy
Ovo reviews direct debits every three months, and will always review them when it has announced new prices, so you'll likely see your direct debit change in the coming days.
Full info below, or you can see Ovo's explanation of how it sets direct debits.
Ovo Energy's direct debit rules
| How are direct debits (DDs) calculated? | Estimated annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Every month in the background, but it will only update your payment every three months (if needed). It will also review and update payments when prices change. You can see when your last review was in your online account. |
| When are price changes factored in? | Once Ovo has confirmed its new rates after a price change, it will review your payment and factor in the new costs. |
| Can you adjust your direct debit? | Yes. You can increase or reduce your payment amount in your online account in the 'Payments' page, or by contacting Ovo. You can reduce your payment by up to 10% and increase your DD to a max of £2,000/month. |
| Will DDs be adjusted for the £400 support payment from October? | No, it'll be a monthly refund paid into your bank (of £66 or £67) within five working days of your monthly DD being taken from Oct to Mar. |
| How is debt or credit factored in? | Credit and debt are factored into your expected annual costs over the next 12 months – by adding or subtracting the amount from your annual costs, then dividing by 12. |
| How much notice is given for any change in DD payment? | Minimum of two weeks. |
| If you're in credit, can you request a refund? |
You can request a refund if you have more than £5 in credit. |
Correct as of January 2023.
Scottish Power
Scottish Power says it reviews direct debits constantly in the background, so you'll likely see your direct debit change in the coming days.
We've full info below, or you see Scottish Power's info on how its direct debits work.
Scottish Power's direct debit rules
| How are direct debits (DDs) calculated? | Your annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Constantly – it continually reviews DDs. |
| When are price changes factored in? | Once Scottish Power has confirmed its new rates after a price change, it will factor in the new costs. |
| Can you adjust your direct debit? | Yes, you can increase or decrease your DD through its 'Direct Debit Manager' tool online, or by contacting the firm. There's no limit to the increase, but it says DDs can only be decreased to a certain threshold. |
| Will DDs be adjusted for the £400 support payment from October? | No, it'll be a monthly refund paid into your bank (of £66 or £67) within five working days of your DD being taken from Oct to Mar. |
| How is debt or credit factored in? | Credit and debt are factored into your expected annual costs over the next 12 months – by adding or subtracting the amount from your annual costs, then dividing by 12. |
| How much notice is given for any change in DD payment? | 14 days. |
| If you're in credit, can you request a refund? | Credit balances are automatically refunded if your balance is more than one month's payment, or £75, during a review. If it's less, it'll be included in your next 12-month payment plan and you'll pay slightly less each month. |
Correct as of January 2023.
Shell Energy
Shell reviews direct debits at least every three months, and will always review them when it has announced new prices, so you'll likely see your direct debit change in the coming days.
Full info below, or you can see Shell's explanation on how it sets direct debits.
Shell Energy's direct debit rules
| How are direct debits (DDs) calculated? | Your annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Every three months from your first DD, and when prices change. You can contact Shell to find out when your next review is. |
| Are future price changes factored in? | Once Shell has confirmed its new rates after a price change, it will review your payment and factor in the new costs.
|
| Can you adjust your direct debit? | Yes, you can increase (by up to 60%) or reduce your payment in your online account – though it will ask you to call it if you want to reduce your payment by more than 20%. |
| Will DDs be adjusted for the £400 support payment from October? | Yes, it will reduce your monthly payment by £66 or £67 from Oct to Mar.
It has told us that some Shell customers that pay their direct debit right at the start of month won't have had their payment reduced in Oct – you'll instead get your payments reduced between Nov and Apr. |
| How is debt or credit factored in? | Credit and debt are factored into your expected annual costs over the next 12 months – by adding or subtracting the amount from your annual costs, then dividing by 12. |
| How much notice is given for any change in direct debit? | 14 days. |
| If you're in credit, can you request a refund? | You can request a refund or choose to lower your DD. |
Correct as of January 2023.
So Energy
So Energy reviews direct debits at least twice a year, and says it will also review them when prices change. It will be when it has announced its new prices, so you'll likely see your direct debit change in the coming days.
Full info below, or you can see So Energy's explanation on how it sets direct debits.
So Energy's direct debit rules
| How are direct debits (DDs) calculated? | Your annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | At least twice a year and when prices change (you'll be notified before a review and asked to submit a meter reading). It will additionally review if usage falls out of tolerance of the current DD. |
| When are price changes factored in? | Once So Energy has confirmed its new rates after a price change, it will review your payment and factor in the new costs. |
| Can you adjust your direct debit? | Yes, you can increase or reduce your payment in your online account. It says the limits will vary by customer. |
| Will DDs be adjusted for the £400 support payment from October? | Yes, it will reduce your monthly payment by £66 or £67 from Oct to Mar. |
| How is debt or credit factored in? | Credit and debt are factored into your expected annual costs over the next 12 months – either by adding or subtracting the amount to/from how much it forecast you'll pay for energy, then dividing by 12. |
| How much notice is given for any change in DD payments? | Five working days. |
| If you're in credit, can you request a refund? | You can request a refund or choose to lower your DD. |
Correct as of January 2023.
SSE
SSE reviews direct debits every six months, and will always review them when it has announced new prices, so you'll likely see your direct debit change in the coming days.
Full info below, or you can see SSE's explanation on how it sets direct debits.
SSE's direct debit rules
| How are direct debits (DDs) calculated? | Estimated annual costs divided by 12, with seasonal use factored in. |
| How often are they reviewed and when? | Every six months, and when prices change. |
| Are future price changes factored in? | Once SSE has confirmed its new rates after a price change, it will review your payment and factor in the new costs. |
| Can you adjust your direct debit? | Yes, you can increase or reduce your payment in your online account. You can reduce your payment by up to 15%, and there's no limit to how much you can increase it by. |
| Will DDs be adjusted for the £400 support payment from October? | No, it'll be a monthly refund paid into your bank (of £66 or £67) in around five working days from your monthly DD being taken between Oct and Mar. |
| How is debt or credit factored in? | Credit and debt are factored into your expected annual costs over the next 12 months – by adding or subtracting the amount from your annual costs, then dividing by 12. |
| How much notice is given for any change in DD payment? | 14 days. |
| If you're in credit, can you request a refund? |
Yes, if you have more than £5 in credit and give a meter reading. |
Correct as of January 2023.
MSE weekly email
FREE weekly MoneySaving email
For all the latest on the energy crisis, simply sign up today!
Spotted out of date info/broken links? Email: brokenlink@moneysavingexpert.com
-
Ovo launches one-year fixed tariff – but is it worth switching to?
24 March 2023![]()
Almost every household has been charged the same price for their energy over the last year under the Energy Price Cap (EPC) and the Energy Price Guarantee (EPG), with no cheaper fixed deals to switch to. That has now changed, with Ovo launching a one-year fix for existing customers that undercuts the EPG level of £2,500 a year. -
BT customers 'forced into overdrafts' after duplicate payment error - here's what you need to know
24 March 2023![]()
BT customers have complained that they've been forced into overdrafts after payments were wrongly taken twice this month. The telecommunications giant said it will refund any duplicate payments taken automatically. -
Martin Lewis: Four urgent ways you may be due £1,000s in tax back – if you're married, had a PPI payout, wear a work uniform or even just pay tax
23 March 2023![]()
If you're married or in a civil partnership, have ever had a PPI payout, wear a uniform to work or pay any income tax, you could be due £100s or even £1,000s in tax back – but you'll need to check urgently. -
Bank of England increases base rate to 4.25% – what the rise means for your mortgage and savings
23 March 2023![]()
The Bank of England has increased the base rate from 4% to 4.25%. This rate is used by the central bank to charge other banks and lenders when they borrow money – and so it influences what borrowers pay and what savers earn. -
Broadband and mobile users to be hit with price hikes of up to 17.3% in April – here's what you need to know
23 March 2023![]()
Millions of BT, EE, O2, Plusnet, Shell, Sky, TalkTalk, Three, Virgin Media and Vodafone customers will be hit with price hikes of up to 17% this spring, on the back of a sharp increase in the cost of living.
-
Martin Lewis: Is it time to ban unnecessary Christmas presents?
5 December 2022![]()
Update September 2017: It’s eight years since I first braved this subject, expecting a snowstorm of protest. Instead, year after year more join in, like Julia who recently tweeted me, “@MartinSLewis, finally took your advice and told my family I can’t afford Christmas presents. What a weight off my mind. Thank you.” One year even the Archbishop of... -
Martin Lewis: The one thing everyone aged over 66 needs to know
29 November 2022![]()
It is a national tragedy that getting on for a million pensioners, many of whom have been paying into the system for years, are missing out on a critical boost to their income. It's called pension credit, and this year it also means you get an extra £650 to help with energy bills.
.png.rendition.320.320.png)
MSE tools & calculators
Clever ways to calculate your finances
