Bills and payments

How do Direct Debits work?

A Direct Debit is an automatic monthly payment set up with your bank or building society. It means you can choose which day you want the payment to go out each month, and your bank will sort the rest.

Once a Direct Debit is set up, you don’t need to do anything else.

It’s often the best way to make regular payments, such as your energy bill.

Why paying by Direct Debit is the best way to pay

Direct Debit is usually the best way to pay bills because:

  • you get a cheaper rate if you’re on our variable Simpler Energy plan

  • you don’t have to think about it – it’s all done automatically each month

  • you don’t need to worry about forgetting or missing a payment

  • it can help you budget as you know how much is going out of your account each month and when

  • it spreads your year’s energy costs evenly over 12 months

How we work out your Direct Debit amount

To work out your monthly Direct Debit amount, we:

  • look at your energy use to date and how much you’re likely to use until 31 March, or the end of your contract if you’re on a fixed plan

  • take into account your current balance and any other costs such as the standing charge and any add-ons you have

  • divide the amount by the number of payments left until 31 March, or the end of your contract, and that gives us your monthly amount

Our aim is to make sure you don’t build up unexpected debt by the end of winter, or the end of your contract if you're on a fixed plan.

Why your Direct Debit amount might be different to your bill amount

How much energy you use can change from month to month, so your actual bill might be a different amount to your Direct Debit amount.

But we make sure you’re paying the right amount each month to cover your whole year’s energy use, spread out over 12 monthly payments.

Why meter readings are important

You can make sure your Direct Debit amount stays at the right level by giving us regular meter readings – once a month is best.

How we work out your Direct Debit amount when you join us

If you’re new to OVO, we work out your Direct Debit amount to cover your expected energy use over the next 12 months. We base it on your past year’s energy use if you know it.

If we don’t know it, we’ll ask you about your property and how many people live there, then we’ll base it on the average data for your type of household.

After 2 months we check in to make sure the amount you’re paying is right for your actual energy use. Your Direct Debit amount might then need to go up or down.

How often we check you’re paying the right amount

We review your Direct Debit every 3 months to make sure you are not paying too much or too little for the energy you’re using.

We let you know if your Direct Debit amount needs to change to keep you on track.

When your payment amount might change

Your payments might need to go up or down if something changes, such as:

  • your energy use goes up or down

  • the price of energy goes up or down – if you’re on a standard variable tariff

  • you change which energy plan you’re on

  • you missed a payment or recently requested a refund

  • you’ve chosen an add-on, such as Greener Energy or OVO Foundation

If your Direct Debit is too high or too low, then we’ll let you know we’re going to have to change the amount.

If your balance is in credit

It’s good for your balance to be in a bit of credit as it acts like a pot of money to cover when your energy use is higher.

For example, you’re likely to build up credit in the summer months when energy use is lower, but you might need to tap into your credit in the colder and darker winter months when energy use can be much higher.

We check you’re paying the right monthly amount so your balance stays on track for the whole year.

Even if your balance is in credit, it might be that we still need to increase your monthly payments. This would be if we’ve worked out what your energy use is likely to be and that your balance is likely to go below zero by the 31 March or end of your plan.

If your balance goes below zero

If your balance goes below zero, we’ll let you know if your monthly Direct Debit amount needs to go up.

If you’re struggling to pay your bills, we can work it out together – sign up to our payment support tool.

Setting up or changing a Direct Debit

You can set up, change the amount or date of your Direct Debit by logging into your online account and following these steps:

  • Go to Home

  • Select Set up your Direct Debit

  • Choose which day you’d like us to collect your payment each month. This can be any date from the 1st to the 28th

  • Enter your Direct Debit amount. You can use our Direct Debit calculator to get an accurate prediction of what you should pay each month

  • Put in your details, including your full name, sort code and bank account number

  • Select Next

  • Check the details you’ve entered are correct

  • Select Confirm payments

We’ll send you an email within 3 working days to let you know it’s all set up.

Find out how to set up or change a Direct Debit in the app.

Ask the OVO Forum

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