logo-rebrandphone Skip to main content

Energy bill payments by Direct Debit

Energy bill payments by Direct Debit

Direct Debit is often the cheapest way to pay for energy, but how does it work?

Monthly Direct Debit is a popular way of paying for energy bills, and this is primarily because of the savings energy suppliers often give you for paying by this method.

However, the amount you pay for your direct debit isn't necessarily what you'll be charged for your month's energy.

Compare energy prices here

It's a good idea to compare energy regularly to see what the latest prices mean for you, even though there are fewer deals available. Enter your postcode to get started.

How does Direct Debit work for energy?

When you switch energy supplier the new supplier will arrange your direct debit to cover what they expect 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) they 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 cheaper seasons (spring/summer) to cover you during 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.

Why has my supplier adjusted my direct debit?

When your supplier notices your direct debit is not covering the actual cost of your energy, they 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 them 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.

If I switch my bank account, will it be hassle to update my energy Direct Debit?

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/building society branch.

Most banks/building societies aim to complete the switch of your regular payments from your old account to your new account in around seven days.

If I switch supplier, what should I do about my Direct Debit?

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 them

What will happen if I don't have enough money in my bank account to pay my Direct Debit?

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.

Read more …

Share this article