What are seasonal payments and how are they calculated?
We understand that you may not use your energy evenly throughout the year, so paying an equal amount each month doesn't suit everyone.
That's why we offer the option to pay a different amount during summer months and winter months, so you pay more when your usage is higher and less when your usage is lower.
We also have a guide to making Equal Direct Debit Payments. You can switch to equal Direct Debit payments through your online account at any time.
How we calculate summer and winter payment amounts
Firstly, we calculate your estimated annual energy cost and divide this by 12, giving your average monthly payment amount. We then adjust this for the time of year, reducing your average payment by 25% during the summer months and increasing it by 25% for the winter.
Your summer payments are taken between April and September and your winter payments between October and March.
Whether you pay by equal monthly instalments or by a seasonally adjusted amounts, you'll pay exactly the same amount over the course of 12 months.
Your estimated annual usage is based on all the information you provided to us during your quote process. The most accurate way to estimate your costs is using annual kWh figures (these can be found on your energy bills), but if you don't know this or have them to hand, we can help you estimate your annual cost by looking at the tariff you are currently on and how much you are paying, or by selecting either the 'basic estimate' or 'detailed estimate' options.
In the above example we expect to spend £600 during the course of the next 12 months based on the information provided. This means that an average payment amount is £50 per month (£600 / 12 months = £50).
Summer payments are calculated by reducing this by 25%, in this case: £50 x 75% = £37.50.
The winter payments are calculated in a similar way by increasing the average payment by 25%: £50 x 125% = £62.50.
Adding up all the payments over the course of the year: 6 x Summer Payment (£37.50) + 6 x Winter Payment (£62.50) = £600, the same as if you paid equally through the year.
What this means for your Account Balance
As we take payment in advance of your usage, we expect your account to remain in credit for most of the year. However, if you are paying seasonally adjusted amounts, we would expect the fluctuation of your account balance throughout the year to be less than if you paid equal amounts each month. Those paying an equal amount each month could expect to see a much bigger credit towards the end of summer, and a much bigger debit towards the end of winter.
During your first month, your account will be in credit because we've taken your first Direct Debit but we haven't produced your first statement yet. Your next month's Account Balance will be calculated as follows: the Account Balance from the previous period (i.e. your first payment) - your charges for the month before + plus your next month's advance payment.
In the example above, the January Account Balance is the winter payment amount (£62.50). The February Account Balance is the previous month's Account Balance (£62.50) - January energy charges (£71) + February advance payment (£62.50) = £54 CR.
Switching from equal to seasonal Direct Debit payments
You can switch from equal to seasonal Direct Debit payments or vice versa. We simply require at least 7 days' notice before your scheduled payment date. We may also require you to make a top-up payment if your switch will result in an overall shortfall in payments, or if your account is in debit. You can change your payment plan via your online account.
Last updated: Wed, 18 Sep, 2019 at 4:44 PM
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