Home phone customers pay £184 million for paper bills and paying by card

Customers could save a collective £184 million a year by changing the way they handle their phone bills.

A study of the top five home phone companies by uSwitch reveals that paying bills by Direct Debit could save consumers £69 million a year, while getting bills by email rather than by post could save £115 million.

The survey of almost 8,000 phone customers reveals that 87% of people pay their bills by Direct Debit, 6% by credit or debit card and 4% by cash or cheque. Card or cash payments come at a price: BT charges an additional £1.50 a month for non direct debit payments; TalkTalk charges £3.50 a month and Virgin Media adds a hefty £5 a month onto bills.

The survey also found that 1 in 3 customers (34%) still get paper phone bills on paper, which costs BT and Virgin Media customers an additional £1.25 a month, and TalkTalk customers £1.45 a month.

Of the five major home phone companies, the Post Office is the only one not to charge its customers a premium for card payments and paper bills. This policy seems to be popular with Post Office customers - 42% pay by means other than Direct Debit and 71% opt to receive their bills in the post.

	Monthly line rental cost	Monthly fee for cash/card payments	Paper bill charge	% paying by cash/card	% receiving paper bills
BT	£12.04	£1.50	£1.25	13%	43%
Post Office	£12	No charge	No charge	42%	71%
Sky	£11	£0.50	No charge	5%	29%
TalkTalk	£12.04	£3.50	£1.45	8%	16%
Virgin Media	£11.99	£5	£1.25	9%	32%

Prices are from 1st October 2010
Basic line rental cost assumes payment by direct debit and online billing (where applicable)
BT Line Rental Saver available from £9.49 a month for customers paying 12 months in advance.

Ernest Doku, communications expert at uSwitch.com, comments: "The savings consumers could make by changing the way they receive and pay their bills could go some way towards wiping out the astronomical increases we're seeing to call charges this year. The £184 million comes on top of line rental fees and the cost of calls. For many this is simply money down the drain.

"Paper bills are fast becoming a luxury that many consumers can no longer afford. There are clear environmental as well as financial benefits to receiving bills electronically, but it's important that customers continue to check their bill rigorously every month when it comes through on the email.

"Customers should think too about whether they really need to settle their bills by cash or card. If they do, they could save serious money off the bottom line by moving to a different phone company. Primus, for example, offers line rental for £8.99 a month. There's no extra charge for card payments, although paper billing costs an extra £1.76 a month."

From next month, two of the UK's largest home phone companies are set to raise prices for the second time this year. From 1st October, BT line rental is being going up to £12.04 a month, call set-up fees to 10.9p and daytime call rates to 6.4p per minute. TalkTalk is also raising prices - line rental will climb to £12.04 a month, call set-up fees to 10.9p and daytime call rates will jump to 6.4p per minute - a staggering increase of 39% since the start of the year.