Octopus Energy has announced a significant financial benefit for its customers who choose to pay their bills via Direct Debit. The green energy supplier, which competes with major firms like British Gas, EDF, E.ON, and OVO, confirms that this popular payment method is saving the average household a substantial £93 each year.
How Direct Debits Cut Energy Costs
The company clarified that setting up a monthly Direct Debit online leads to an annual saving of approximately £93 for the average home on its variable tariff. This saving stems from reduced administrative costs for the provider, which are then passed on to the customer in the form of a lower unit rate for gas and electricity.
Octopus Energy emphasised that the steady monthly payment plan is its most popular option. It allows customers to spread their energy costs evenly across all twelve months, avoiding the typical pattern of lower summer bills followed by much higher winter payments. This approach provides greater budget certainty and helps prevent bill shocks during colder periods.
Transparent Calculations and Customer Control
The energy firm detailed its process for calculating Direct Debit amounts. When a customer joins, Octopus takes the unit rate of their chosen tariff and multiplies it by the estimated annual energy consumption. This forecast is based on industry data from meters and any readings provided by the customer. The daily standing charge is then added to determine the total annual cost, which is divided by twelve to establish a base monthly payment.
"We never increase your payment just for the sake of it," the company stated. It conducts frequent account 'health checks' to ensure a customer's balance and payments are at an appropriate level. Adjustments are made primarily to ensure payments cover the cost of energy used and to help customers reach a healthy account balance.
Managing Your Account and Proposed Changes
Octopus Energy stressed that customers remain in full control of their payments. They can adjust their Direct Debit amount online or by speaking directly with the customer service team at any time.
If a review suggests a change is needed—for instance, if a customer's balance is projected to be below target by April—the company calculates the difference and spreads this adjustment over the next twelve months. Customers are then notified of any proposed change via email well in advance, with clear options to accept or decline the adjustment. If email communication fails, the information is sent by post.
The supplier highlighted that this system is designed for customer convenience, smoothing out the seasonal variation in energy use where winter consumption can be around 50% higher than in the summer months.
