How Direct Debits are calculated?

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As an E.ON Next customer, you have lots of options on how to pay your energy bills. Direct Debit is a popular choice that could even save you money with lower energy bills. Find out more about the benefits of paying by Direct Debit and how you can set one up today.
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What is a Direct Debit?

A Direct Debit, also referred to as ‘DD’, is a payment method you can use to pay for your energy. Once set up, your bank automatically sends an agreed amount of money from your account to us each month, to pay for your energy bills.

There are two types of Direct Debit:
  • Fixed Direct Debit. In a fixed Direct Debit you arrange to pay a set amount each month, meaning your payments will stay the same throughout the year. Your Direct Debit payment amount will be based on an estimate of your total annual energy use split into equal monthly payments.
  • Variable Direct Debit. Instead of setting a fixed amount to pay each month you agree to pay a varying amount based on your energy use. If you set up a variable Direct Debit, you will pay for exactly what you use, and so your energy bills are likely to be higher in the winter and lower in the summer.

Fixed and variable Direct Debits are not related to fixed and standard variable tariffs. It is possible to pay for a fixed tariff with a variable Direct Debit and vice versa.

As an E.ON Next customer you can choose to pay your energy bills via Direct Debit at any time. We will agree on a date that your payment will be taken each month and an amount based on your usage. If you start using more energy, or you are on a tariff where your energy prices can vary, we will always contact you to let you know if there will be changes to your Direct Debit amount.

You can also manage your Direct Debit online by logging into your account. There you can set a new payment date and request to change the amount if you feel you are paying too little or too much.

Learn more about paying by Direct Debit.

What are the benefits of paying by Direct Debit?

  • Cheaper energy tariffs. You can save money on your energy bills by opting to pay by Direct Debit. Paying by Direct Debit is usually around 6% cheaper than by other payment methods1, due to having lower operating costs.
  • Automatic billing. Once you set up your Direct Debit you will pay your bills automatically every month. That means you don’t need to worry about forgetting to pay, delays in your payment being received, or your money being lost in the post.
  • Spread the cost. If you are on a fixed Direct Debit (where you pay a set amount each month), then your payments are calculated to spread the cost of your energy throughout the year. Most homes use more energy in winter. That’s why we calculate your Direct Debit payments so you accumulate credit in the summer to help pay for your energy in the winter - meaning you won’t suddenly start paying more each month when your energy use goes up.
  • Protection with the Direct Debit Guarantee. All Direct Debit payments are protected by the Direct Debit Guarantee. This means that changes to the payment date, frequency, or amount must be notified at least 5 working days before payment is due to be taken. It also guarantees that you are allowed to cancel your Direct Debit at any time, and that in the event of an error in one of your payments you are entitled to a full and immediate refund.

Setting up your Direct Debit.

Want to change your payment method to Direct Debit and start saving money on your energy bills? Simply get in touch with one of our Energy Specialists, and they can help you get set up. Please be aware that it can take up to 14 days for your bank to complete the setup of a new Direct Debit.

How we calculate your fixed Direct Debit.

Energy bills are calculated based on the amount of energy you use. To prevent you from getting unexpected bills at the end of the year, we try to make sure your monthly fixed Direct Debit payments will cover the cost of your total energy use over the year. That means that in the summer you may be in credit and in winter you may be in debt – but overall your account should balance as close to £0 as possible at the end of each year.

Reasons your Direct Debit amount may change.

  • You are on a variable Direct Debit. A variable direct debit is when you pay for the energy you use instead of agreeing upon a set amount to pay each month. This means you should not receive any unexpected bills at the end of the year. However, it also means the amount you pay each month will fluctuate with your usage - meaning you may pay significantly more in the winter compared to the summer. Therefore, it is a good idea to plan ahead for the colder months by setting a little extra aside when it is warmer and you are spending less.
  • Payment adequacy. Payment adequacy is a review of your monthly payment to check it is right. If you are consistently using more energy than your monthly payments, we may suggest that you adjust your Direct Debit to avoid accumulating too much debt on your account. In some cases, we may also advise this if you are not accumulating enough credit to cover the estimated rise in bills during colder months. Find out more about payment adequacy.
  • Your energy price has changed. If you are on a standard variable tariff your energy price is determined by the price cap (currently discounted by the Energy Price Guarantee). Changes to the price cap may affect your energy prices, meaning that your energy bills could increase or decrease. To account for these changes your Direct Debit amount may need to be adjusted. Learn more about the price cap.

Contact our Energy Specialists if you’re having difficulty.

Our Energy Specialists are here to help you if you’re concerned about your energy bills or need advice with moving. If you’re struggling to pay, please visit our help page to find out more about how we can support you. You can reach out to our Energy Specialists for personal advice on Facebook and Twitter.

Rising bills help.

We want to reassure you that we are dedicated to helping you where we can. We have put together some helpful resources where you can access support from us, charities and the government.
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Feel the Community power.

The E.ON Next Community is a space for customers just like you, sharing their experiences to offer a helping hand. Find support or suggest your own unique topics, plus get involved in discussions of all the latest news. Join the conversation now.

1 https://www.moneysavingexpert.com/utilities/lower-energy-direct-debits/

Blog published: 28/03/23