Direct debits for energy bills are in decline

The number of people switching energy supplier and opting to pay their bills by direct debit is in decline, a cause for concern as the best energy deals are linked to direct debit payments.

According to uSwitch.com, there’s been a 7.3% drop in the number of people switching energy supplier paying by direct debits.

The concern is those not paying by direct debit are missing out on the best energy deals, losing out on over £33 million of discounts.

Use a comparison website such as uSwitch.com or moneysupermarket.com to compare energy deals and you’ll see the marked difference between energy bills on a standard plan paying by cash or cheque, standard energy plan paying by direct debit and online energy plans paying by monthly direct debit.

The move away from direct debits follows issues over the way many people ended up playing catch up on their energy bills as a result of underpaying for months before the energy price increases of last year fed through into the monthly payments.

Ofgem is to introduce new obligations on energy suppliers to ensure direct debit payments are accurately set and clearly explained.

As Anne Robinson, Director of Consumer Policy at uSwitch.com, says ‘Paying by direct debit opens the path to the cheapest energy prices in the market – this is not something to give up without a fight.

If you are worried about the amount you are paying, contact your supplier to find out whether the monthly payment can be lowered. Make sure you are paying the lowest possible price for your energy by shopping around, cut down on the amount of energy you use and make sure you or your supplier is taking regular meter readings.

Above all, be aware that coming off fixed monthly direct debit and paying by cash, cheque or variable direct debit will cost you money. This should always be the last resort.’