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What are seasonal payments for energy bills?

Emma Spencer
Written by  Emma Spencer
5 min read
Updated: 07 Feb 2024

One way you can pay your energy bill is in seasonal payments - four per year. Here's how that works, and what it means for your energy bills.

As the seasons change, so does our energy consumption. Many of us enjoy lower utility bills during the warmer months, only to be hit with higher costs when the cold sets in. But what if there was a way to adjust your energy bill payments to reflect this seasonal variation? Enter the concept of seasonal payments.

Introduction to Seasonal Payments

Seasonal payments are designed to help you manage your energy bills by aligning your payments more closely with your actual energy usage. Unlike the traditional method of fixed monthly payments, seasonal payments decrease during the summer months when energy usage is typically lower and increase during the winter when more energy is needed to heat your home.

Person paying bills with a calculator

Explanation of Seasonal Payments for Energy Bills

For those who find it challenging to budget for higher energy costs in the winter, seasonal payments can offer a more manageable solution. Standard energy deals often involve consistent monthly payments throughout the year, which can lead to a credit balance during the summer. This balance is then used to offset the higher costs in the winter. Seasonal payments, however, adjust the payment amount based on the time of year, directly reflecting your energy consumption patterns.

Mechanics of Seasonal Payments

The mechanics are straightforward: you pay less during the summer and more in the winter. This approach can be particularly appealing for those who want to avoid giving a 'free loan' to their energy supplier in the form of a credit balance during the warmer months.

Calculation of Seasonal Payments

The way seasonal payments are calculated can differ from one energy supplier to another. For instance, So Energy calculates an average annual usage based on existing energy bills and then divides this by 12 to get a monthly average bill. They then offer a 25% discount on this amount between April and September, and winter bills rise by 25% of the average monthly cost.

Illustrative Example

To put this into perspective, let's say your average annual energy bill is £1,200. Under a traditional payment plan, you would pay £100 each month. With a seasonal payment plan, you might pay just £75 per month during the summer and £125 per month during the winter.

Availability of Seasonal Payment Options

Seasonal payment options were once more widely available, offered by several smaller energy suppliers such as Igloo and Pure Planet, which no longer exist due to the recent energy price crisis. Currently, companies like So Energy continue to offer seasonal payment plans to their customers and may offer the best deal for those looking to switch to paying less in the summer.

Comparison with Standard Energy Bills

When comparing seasonal payments to standard energy bills, it's important to note that the total annual cost remains the same—it's just distributed differently across the year. Standard bills keep your payments identical each month, while seasonal payments fluctuate to match your usage.

Advantages and Disadvantages of Seasonal Payments

There are both pros and cons to consider with seasonal payments:

  • Pros:

    • Lower costs during the summer months

    • Bills that more closely reflect actual energy usage

    • Reduced credit balance with energy suppliers

  • Cons:

    • Higher bills in the winter can add financial strain and a level of uncertainty to bills

    • Seasonal payments are not widely available from all providers

    • No overall cost savings or discount when compared to standard bills

Assistance with Energy Bills

If you're struggling with energy bills, it's always a good idea to contact your supplier. They are obliged to help and may be able to offer more affordable payment plans or provide access to dedicated hardship funds. Although the government's £400 energy bill discount ended in spring 2023, other support options are available, such as:

  • The Winter Fuel Payment, offering £250 to £600 for those born before 25th September 1957

  • Three £300 instalments for individuals on benefits, including Universal Credit, as part of a dedicated cost of living payment

  • The Warm Home Discount, offering £150 for pensioners

  • The Cold Weather Payment

Managing your energy bills can be a challenge, but understanding your options, like seasonal payments, can make a significant difference. Whether you prefer the predictability of fixed monthly payments or the alignment of seasonal payments with your actual usage, the key is to find a plan that works best for your budget and lifestyle. Remember, while seasonal payments won't save you money overall, they can certainly help smooth out the financial bumps that come with the changing seasons.

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