How to deal with energy bill issues
CHANCES are I am like millions of other house holders, like thousands of others in Newton Abbot and maybe a dozen in the street where I live, in that the thing that I do every month, 12 times a year, is pay my energy bills by direct debit.
I pay a fixed amount so that in the summer warm months I pay more than I burn, so build up a credit balance that might well run up to £1,000 or more, sitting ready to help pay the winter months bills.
If we are careful during cold winter months, that credit balance will meet the growing increase in the winter months’ bills as we use more and more energy to keep warm.
It seems sense, it smooths a cost level through the year, pay a little more now and not have to find more later.
It all sounds like a neat, worryfree system, but is it? The energy company banks our surplus money and earns interest or dividends on it, and you do not get a penny of that interest. The energy companies keep it all.
My energy usage is now dropping and so is the bill, so my surplus account is growing again. Not any more.
Every month, I ask for a cheque for the over-payment. I want to see a zero balance in the surplus account, but I don’t spend it.
There are a number of risk-free choices of what to do with it . A deposit account with your bank or building society, but my favourite is a risk-free little flutter: Premium bonds with NS& I.
Every month I buy more bonds with the cheque from the energy company. If you win nothing, you have lost nothing.
The experts tell me the average chance of winning actually show that bond holders, on average, get a 4% net yield on their money, riskfree.
In those expensive winter months, when the bill is more than your monthly direct payment, all you do is draw down the difference from your premium bond holding and pop the cheque into your normal bank account.
If you are lucky and get a winner on NS&I premium bonds, well, buy more bonds with it, just in case it’s a really hard winter.
M Don Frampton Newton Abbot, Devon