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Cheque users losing out on energy bills

Direct debit customers pay almost £100 less

Energy bill

Paying your energy bill by cash and cheque could cost up to £100 more than by direct debit

New research by Which? Money has found that customers paying their energy bills by cheque could be paying almost £100 more on average over a year than paying by direct debit.

The research looked at the standard annual duel-fuel tariffs available across the six biggest energy companies – British Gas, EDF, Eon, Npower, Scottish Power and SSE. The difference in price between paying by quarterly cash and cheque and monthly direct debit came to an average of £98.60 over the course of a year.

In order to get the UK-wide average price, annual costs were obtained for each region of the country with an average taken from each.

Cheque users missing out

Research by charity Age UK shows that use of direct debits to pay utility bills decreases directly with age, particularly among the over 70s. Many younger consumers, especially those in low-income households, also feel that direct debit gives them less control than other payment methods.

Energy companies normally offer a discount to people who pay by direct debit as it guarantees payment to them and makes the account easier and cheaper to manage. Some companies do offer prompt payment discounts if you pay by cash and cheque on time, though these won’t be as high as the ongoing discounts given to direct debit customers.

Which? researcher Alex Kouzarides commented: ‘While it may suit the energy suppliers to manage direct debit accounts, many people still prefer more traditional methods or simply have no choice in their circumstances. It’s vital that utilities companies develop fair and inclusive systems that ensure all consumers are given a fair deal.’

The full article entitled ‘Time to cheque out?’ features in the December issue of Which? Money magazine.

Which? energy campaign

Which? is campaigning for more affordable energy for everyone – we’d like to see more competition and genuine change in the energy market.

In the short term, we’re asking energy companies to commit to helping consumers by, for example, offering free insulation to all customers until April 2012, and giving extra financial support to elderly customers.

Which? is also urging the government to put money back into schemes such as Warm Front and the Community Energy Saving Programme (CESP) to help people make their homes more energy efficient, and energy bills more affordable for those who are struggling.

More on this…

  • See how the energy companies propose to help customers this winter

  • Go to Which? Switch to see how much you could save on your energy bills

  • Sign up to the Which? campaign to get more affordable energy for everyone

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