Monthly Direct Debit is a popular way of paying for energy bills, primarily because of its ease and the fact that it can often work out slightly cheaper than paying by other methods.
However, the amount you pay for your direct debit isn't necessarily what you'll be charged for your month's energy.
When you switch energy supplier the new supplier will arrange your direct debit to cover what it expects your bills to be — based on the details you provided during switching. For example, you may have your direct debit set at £50 a month. This is added to your energy account each month, and when your supplier receives meter readings (it's recommended you provide them at least once a quarter) it will update your charges accordingly.
This process can leave you owing money (in debit) or having overpaid for your energy (in credit) when the real cost of your energy is calculated. If meter readings aren't supplied, the supplier will base your monthly charges on an estimated bill — this is not accurate. It's a good idea to build up enough credit over the spring and summer when you're not likely to have the heating on so you're covered during the winter when you're using a lot of energy.
If you find that after winter you are left with a lot of credit, you may want to claim back any remaining money in your account or request to adjust your direct debit.
When your supplier notices your direct debit is not covering the actual cost of your energy, it may increase the amount you pay each month. If you can't see any clear reasons why your direct debit has been adjusted, call your supplier and ask it to explain.
As part of the terms of some fixed rate energy deals, suppliers may increase your direct debit amount by 20% over the winter months. The rates you are charged per unit of energy do not change, but the supplier increases the direct debit to cover any extra usage.
Your new bank or building society will transfer all regular and recurring payments such as Direct Debits to another bank or building society, free of charge — this is under the Current Account Switch Guarantee.
More information can be found about switching by asking a member of staff in any bank or building society branch. Most banks and building societies aim to complete the switch of your regular payments from your old account to your new account in around seven days.
When you switch supplier, you will be asked to set up your direct debit ahead of the date the new supplier takes over the supply of your energy. After paying off any final bills to your old supplier, you should cancel your direct debit as a precautionary measure to ensure you are no longer charged by it.
If you don't have enough funds available in your bank account to pay your Direct Debit, then it may be returned unpaid. This could result in a charge from your bank to cover the additional administration. If this happens it is important to act quickly and make funds available in case the Direct Debit is re-presented for payment. If you think that you may struggle to meet your Direct Debit payments, where possible you should contact your supplier in advance of the payments being requested, so alternative payment options can be explored.
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