What are equal payments and how are they calculated?

The cost of energy is one of the largest household outgoings, so budgeting correctly for it is a must. Traditionally, you might have paid your energy company more when you used more energy (typically during the winter months) and less when you used less (in the summer months). This isn't ideal for everyone, as most of us get paid the same each month regardless of whether it's cold outside.

Equal Direct Debit payments help you to budget and avoid any nasty surprises. We regularly review how much you're paying to ensure that your equal payment amount reflects your expected energy usage.

We also have a page as a guide for those making Seasonal Direct Debit Payments. You can change your payment plan through your online account at any time.

How we calculate the payment amount

We calculate your equal monthly Direct Debit payment amount by taking your estimated annual energy cost and dividing this by 12. This spreads your annual cost of energy into equal monthly payments.

Your estimated energy cost is based on the information you provide to us when you get a quote. The most accurate way to do this is by giving us recent annual kWh figures (these can be found on your energy bills). If you don't have these to hand, we can help you estimate this by looking at the tariff you are currently on and how much you pay, or by asking you some questions about your energy usage.

Most people use more or less energy depending on the time of the year, so you’re likely to see your account balance in debt over winter and in credit the summer. Paying by equal monthly instalments should even this out across the year.

For example, if you're expected to spend £600 over the next 12 months, we will split this into 12 equal payments of £50...

What this means for your Account Balance

We take payment in advance of your usage, so we would expect your account to often be in credit, except during some winter months when it's possible for your account to be in debt.

During your first month, your account will be in credit because we take your first Direct Debit around your supply start date, before any statements are produced. Your next month's Account Balance is 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.

So in the example below, the January Account Balance is the first payment amount (£50). The February Account Balance is the previous month's Account Balance (£50) - the January energy charges (£71) + the February advance payment (£50) = £29 CR. Over the year, your account balance might look like this...