Direct Debit Explained

Lots of people have questions about direct debit, so we’ve produced this quick guide to help answer them and explain how it all works. 

Why payments can change

The first thing to point out is that unlike some of your other direct debit household payments, such as council tax and home insurance, your direct debit with us really depends on how much energy you use, which as we all know, varies.

Think about it for a second. If you replace or upgrade your household appliances, like a boiler or gas fire, the amount of energy you use is bound to change. The same goes for the number of people in your home. As they come and go, your energy use will rise and fall. Then there’s the energy prices themselves. If these go up or down or you decide to switch to another energy package, that’s going to affect your direct debit payments too.

To keep abreast of all these potential changes, we regularly review your payments – every 3 months or so – and conduct a full annual review at the end of your payment year. This helps to ensure that your payments continue to match your energy use and that you never end up with too much credit or debt on your account.

How we work out how much you should pay

When we’re estimating your payments for the next 12 months, we take several factors into account. These include:

• How much energy you’ve used in the last 12 months.
• Any changes to your product or prices since your last review.
• Your prices and any other energy charges.
• Along with any discounts you’re entitled to.
• We’ll also look at the existing balance on your account and offset this against our estimate for the next 12 months.

It’s not an exact science but actual, rather than estimated, meter readings can make a big difference to the overall accuracy. That’s why it’s important you provide us with regular meter readings. You can take them as often as you like, but providing us with an actual meter reading at least once every three months should ensure that your account remains accurate and up to date.

If prices should change

Customers often ask us what happens if the unit price of their energy changes. Well, just because energy prices go up or down, it doesn’t necessarily mean that your payments will follow suit.

If you’re using less energy, for example, your payments may go down even if prices have gone up. Likewise, if you start using more energy, your payments may go up even if prices have come down.

To help you budget, we try to keep your payments at a similar level throughout the year. Because of this, you’d expect to see your account start to build up a credit over the summer months when you use less energy. This helps to cover any higher usage over the colder winter months.

If you’re in credit

If you’re in credit by more than 3 months’ worth of payments by the time your annual review comes round, we’ll automatically refund the credit amount to you. If you have less than 3 months’ worth of payments, we’ll factor this into your estimated payments for the coming year.

Up or down, whenever your payments need to change and for whatever reason, we’ll let you know in advance.

What’s more, if your account has a credit balance at the time of your next annual review, we’ll actually give you money back. ScottishPower will pay you £1 for every full multiple of £33 above a minimum credit value of £100. That’s £1 if your credit balance is £133, £2 if it’s £166 and so on, right up to the maximum payout of £12 for a credit balance of £496. We’re the only energy company to currently offer this kind of reward.

We hope that’s been of use. If you have any more questions, please consult our virtual assistant ‘Katie’. She’s here to help.