There have never been more ways to pay your energy bills, from direct debits to cheque. All of this choice however means it can be confusing and can often end up being more expensive than it has to. This guide will take you through each way you can pay your energy bills, government schemes that can help you, and how you can switch should you choose to.
Direct Debit (monthly/quarterly)
The most common and straightforward way to pay your energy bills is through direct debit. As long as you have the correct amount of money in the account, it will come out directly at agreed intervals. You can either pay monthly or quarterly.
- Monthly - This is calculated through estimating your yearly usage, dividing it by the 12 months, and taking this number out each month. Obviously, this number will not be exact and can result in you either underpaying or overpaying. If you overpay you will have credit on the account which can be used to claim money back or reduce future payments. If you underpay you will owe the energy provider and they could increase the monthly payments to make up for this.
- Quarterly - This works in the same way as a direct debit but will be taken out of your account every 3 months instead of every month. The overall cost will be largely the same it will just mean higher payments as it’s for the whole quarter.
Pay on Receipt
Paying on receipt is when the energy provider simply sends you a bill every 3 months and you pay for the energy you use. This are more useful if a direct debit doesn’t suit you, but you must remember to pay on time to avoid fees.
This is generally the most expensive way of paying for your energy bills. You will use a token or top-up key and pay for the energy before you use it. This is a safer option for a landlord if you’re concerned that your tenants will not pay for their energy.
Depending on your energy provider, you may be able to use an app to keep on top of your bills, check your usage, and top up without having to leave the comfort of your own home.
Using a payment card can be a good option if you want more control over your energy bills as opposed to a direct debit. It works by topping up the card at a PayPoint or Post office, and make the payments when they come in. This means you can spread out the cost of quarterly bills but you will have to pay off the balance before you receive the next bill. the downside of these cards is you cannot top them up online.
This is a repayment method where the Department of Work and Pensions (DWP) deduct the money for your energy bills directly from the benefits that you receive. This is normally for those who are not suited for Direct Debit or prepayment schemes. The types of benefits you can use include Pension credit, Universal credit and Income support amongst others.
Cash or Cheque
These are available from most energy providers and are options for those who prefer to pay quarterly. You can either pay through the bank or your post office or send it directly to your energy provider. Should you send it directly, you must take into account postage times so that you don’t get charged late fees.
Can I get help with paying my energy bills, other than fuel direct?
There are a few other government schemes that can help you if you are struggling to pay your energy bills:
- Winter Fuel Allowance: If you are over pension age, you can receive an annual tax-free payment between £100 and £300 during the winter months.
- Cold weather payment: If the temperature drops below 0 degrees on seven consecutive days and you are on the qualifying benefit, you can receive a £25 payment.
- Warm home discount: You could receive £140 credit during winter if your home qualifies and your energy supplier is signed on to the scheme.
How do I change my payment method?
If you have any of the above payment schemes, apart from a prepayment meter, it should be relatively straightforward to switch payment plans if you contact your supplier. If you have a prepayment meter you can contact your supplier to find out how to make the change to a standard credit meter. The big six suppliers don’t charge for this service, there may be a small charge if your supplier is a smaller one. But it’ll be worth it as you’ll access to much cheaper and more competitive energy tariffs.
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