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Seasonal Monthly Charges

  • 13 August 2020
  • 21 replies
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I am about to switch to PP but I have been presented with seaonal monthly charges which is putting me off pressing the go button. 

Whilst I understand the logic, I don't want elevated utility bills during the xmas season so wondered if we could just have one monthly rate going through all 12 months of the year? 

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Best answer by Mavis1 13 August 2020, 01:32

Hello and welcome.

Im afraid to say thats the way PP roll. I look at it the other way, cheaper in the summer which gives me spare cash to buy donuts. 

 

There are hacks around it. For example. You pay a fixed amount into a seperate bank acct and the PP DD payments with it split payments come out of it.so you dont notice a differance. And if you pay the higher amount for 12 months youll have a few bob spare for xmas.

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Userlevel 7
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Hello and welcome.

Im afraid to say thats the way PP roll. I look at it the other way, cheaper in the summer which gives me spare cash to buy donuts. 

 

There are hacks around it. For example. You pay a fixed amount into a seperate bank acct and the PP DD payments with it split payments come out of it.so you dont notice a differance. And if you pay the higher amount for 12 months youll have a few bob spare for xmas.

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All utility companies do the same every 6 months approx, they calculate it off the back of what energy has been used in your house in the past.  You always pay less in summer months and more in winter months but if you are paying too much then you could get a refund and PP would reduce the payments if needed but honestly all utility companies do the same.  It would all average off eventually and having smet2 meters installed would help also.  Hope this helps

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All utility companies do the same every 6 months approx, they calculate it off the back of what energy has been used in your house in the past.  You always pay less in summer months and more in winter months but if you are paying too much then you could get a refund and PP would reduce the payments if needed but honestly all utility companies do the same.  It would all average off eventually and having smet2 meters installed would help also.  Hope this helps

All utility companies don’t do the same, some have equal monthly payments throughout the year although they may still review every 6 mo.

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Every company I have been with review and change every 6 months.  Best to get in touch with PP and see what they say.

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@ArnyP_HW 

My answer to the question is no you can’t, I understand why you might want to because of budgeting etc. but it’s really no big deal.

Those who start their contracts at the start of the cold period are at a disadvantage or alternatively those who start at the beginning of the warm period are at an advantage.

I will point out something you may not have considered.

The difference between 12 equal and split payments is smaller than you think and here is why

Just say for example you pay £1200 a year

With PP

6x£80 and  6x£120 difference appears to be £40 more in “Winter” £40 less in “Summer”

Winter = Summer times 1.5

however if you were paying in 12 equal payments your monthly would be 12 x £100

Thus the real difference is only £20 more in Winter and £20 less in Summer.

That may not help but I thought I’d mention it

 

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@ArnyP_HW

My answer to the question is no you can’t, I understand why you might want to because of budgeting etc. but it’s really no big deal.

Those who start their contracts at the start of the cold period are at a disadvantage or alternatively those who start at the beginning of the warm period are at an advantage.

I will point out something you may not have considered.

The difference between 12 equal and split payments is smaller than you think and here is why

Just say for example you pay £1200 a year

With PP

6x£80 and  6x£120 difference appears to be £40 more in “Winter” £40 less in “Summer”

Winter = Summer times 1.5

however if you were paying in 12 equal payments your monthly would be 12 x £100

Thus the real difference is only £20 more in Winter and £20 less in Summer.

That may not help but I thought I’d mention it

 

I agree with this statement as summer months I use less so my direct debit comes down £20 where as in winter it's cold and especially here in Scotland it gets cold and dark very quickly so people use more electricity too so my direct debit goes back upto £20 more in winter but overall I must admit PP is cheaper overall than the big 6 utility companies and some smaller ones too.

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Every company I have been with review and change every 6 months.  Best to get in touch with PP and see what they say.

hi Ryan, indeed they do, the OP is unhappy about the split, it’s a problem which mainly bothers those on tighter budgets and older customers.

The way around it is very messy but it can be done, however it requires significant customer intervention, and in my opinion is best left alone. Ironically it’s in the financial interests of the consumer to pay less in the winter, in means PP are holding onto less of your money, but some customers don’t see it that way.

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I've seen my sister in law with £500 in credit with another company who I'm not going to mention but it's a company with tentacles and I've told her today to get it refunded back and the direct debit reduced as it's not right what they are doing and they should have seen this on system.

Userlevel 7
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but it's a company with tentacles 

🐙😂😂😂😂😂😂👍

Userlevel 6
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Not wanting to mention the company for obv reasons but I think your on the ball😂😂😂

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but it's a company with tentacles 

🐙😂😂😂😂😂😂👍

£6

That is all

(sick squid….) 

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but it's a company with tentacles 

🐙😂😂😂😂😂😂👍

£6

That is all

(sick squid….) 

😂😂😂😂😂

I made this point in a similar thread last year: If PP are going to adjust for winter vs summer months to prevent build-up of credit or debits in customer accounts, then they might as well charge the exact amount for usage each month: then there would be NO build up at all.

You are already evening out the payments over 6 monthly cycles. So there's still an element of the customer building up some credit or going into some debit depending on the month they start. Hence  EITHER have everyone pay each month for exactly what they use (no one wins or loses on the "interest"), OR use the fact that there is a large number of customers, all joining at different times (and therefore some winners and some losers, which evens itself out for PP) to allow fixed payments each month over the whole year.

If PP make a profit on credit balances, that means they can pass that on in reduced prices to their customers, so I don’t go along with the argument that customers with credit balances are “losing out”.

Now that PP are offering fixed-term contracts (with less likelihood of customers jumping ship mid-year), then a fixed monthly payment looks fair to me.

Seasonal budgeting not working for me. Big credit already built up over the summer!

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Seasonal budgeting not working for me. Big credit already built up over the summer!

Which (credit) would be even higher if the payments were higher over the summer, which they would be with 12 equal payments, so what you’re saying is the split should be more than 60/40?

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I made this point in a similar thread last year: If PP are going to adjust for winter vs summer months to prevent build-up of credit or debits in customer accounts, then they might as well charge the exact amount for usage each month: then there would be NO build up at all.

You are already evening out the payments over 6 monthly cycles. So there's still an element of the customer building up some credit or going into some debit depending on the month they start. Hence  EITHER have everyone pay each month for exactly what they use (no one wins or loses on the "interest"), OR use the fact that there is a large number of customers, all joining at different times (and therefore some winners and some losers, which evens itself out for PP) to allow fixed payments each month over the whole year.

If PP make a profit on credit balances, that means they can pass that on in reduced prices to their customers, so I don’t go along with the argument that customers with credit balances are “losing out”.

Now that PP are offering fixed-term contracts (with less likelihood of customers jumping ship mid-year), then a fixed monthly payment looks fair to me.

@frankmthompson How do you propose they determine the exact usage?

Even if it was possible what you’re asking for is a free-for-all where no-one would be able to budget. Pay your £50 in the summer and get hit with a £200 bill in the cold spell?  Precisely the opposite of what some people who prefer a fixed amount every month are asking for.

Or get a prepayment meter?

The only point you’ve made which I agree with is that the 60/40 system slightly favours those who join at the start of summer, and after a while even that becomes irrelevant.

 

Hi, woz.

You may be missing my point: customers who want to budget DO want fixed payments. PP claim they're helping customers not build up credit balances... But if you take that to its logical conclusion, you should take the full amount each month. PP have gone half-way by having a "summer" budgeted amount and a "winter" budgeted amount.

I still think it's better, if PP are going to offer a "budgeted amount", to do that over the year, as salaries are normally fixed each month, and all our other bills are set at fixed amounts each month. That was the whole beauty of offering fixed payments throughout a year: you don't have to remember to save up money somewhere to cope with large bills in winter for utilities (or one big insurance premium bill when it's time to renew your car insurance, or whatever).

PP's approach means you still have to be aware of bills changing from summer to winter.

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hi @frankmthompson 

I didn’t miss your point at all, I know the 60/40 split doesn’t suit everyone and neither am I advocating either it, or the 12 equal, I was just pointing out that given the current framework a pay for what you use system just isn’t viable.

What I will say is that taken over a year the 60/40 split is fairer for many customers who use more than 60% of their energy in the colder months. Unfortunately it doesn’t take the human factor into account and is worse budget wise  for the more vulnerable, or poorest, and psychologically worse for older customers who are generally more staid in their approach.

In terms of awareness PP do warn customers before the amount changes, perhaps 2 staggered warnings are needed to allow £ and :heart: adjustment time.

(I still don’t work for PP)

I get paid pretty much the same each month so personally prefer fixed.  I like to keep my finances as simple as possible so setting up a DD for Summer months only is not appealing for me.  It really is horses for courses so please offer a fixed 12 month option then everyone is happy!

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I get paid pretty much the same each month so personally prefer fixed.  I like to keep my finances as simple as possible so setting up a DD for Summer months only is not appealing for me.  It really is horses for courses so please offer a fixed 12 month option then everyone is happy!

Hi there

This topic comes round every six months! @Jon1 's post in this thread really is the best answer, in my opinion. I would simply add I have a number of direct debits every month, and some every quarter. Some are the same, some vary every month. So one that is the same for six months and then changes is a fairly minor blip in my budgeting.

Stephen

It’s a good answer but not better than PP giving people the option to decide what suits them best!

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