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Which? reveals the cost of paying the way you want

Big charges for avoiding direct debits and online accounts

Confused woman with paper

Choosing to receive paper, rather than online, bills, or deciding not to pay for services using direct debit could cost you up to £243 a year, Which? research has revealed.   

We tallied up the charges faced by customers who paid for their broadband bundles, mobile phones and energy by bank transfer and received itemised paper bills after many members said they preferred to pay in these ways. 

They were paying up to £243 more a year compared to customers who paid the same bills by direct debit and managed their accounts online.

Managing accounts online and by direct debit is often cheaper and more convenient, but not everyone wants, or is able, to do this.

Nearly six in ten Which? members say they have concerns about managing their affairs online. Almost half say they find it easier to track their finances with paper bills. 

It’s reasonable for companies to cover the admin costs of these types of payment, but we think some are charging well over the odds.

Here, we reveal which companies have the biggest charges for paying the way you want. 

Broadband, phone and TV

Virgin Media customers who don’t pay by direct debit could pay up to £60 a year extra, plus £1.75 a month for paper bills. That’s an additional £81 on an annual bill. Virgin told us it provides a variety of payment options and continually reviews its charges. 

TalkTalk doesn’t even give new customers the choice to pay by bank transfer – anyone signing up is forced to pay by direct debit. TalkTalk said most of its customers pay online and claimed it offered more ways to pay and to save money on bills ‘than any other broadband provider’.

Find out more: Broadband deals find the best deal for you  

Mobile phone

If you’re on the Three network and you don’t pay by direct debit or arrange a continuous payment authority from a credit or debit card you will pay an extra £49 a year. Three says it recommends customers opt for the billing options with no extra charge. EE and Vodafone charge non-direct debit customers £42 more a year.

EE, O2 and Three charge customers £1.50 a month for paper bills. Vodafone charges slightly more, at £1.54.

Find out more: How to choose the best mobile phone deal – see our expert advice

Energy bills

Energy account-management costs are often linked to specific tariffs. 

For example, Scottish Power’s standard tariff with paperless billing and direct debit is £95 a year cheaper than the equivalent tariff without those options. 

This is reflected across the industry. The average cost of a paperless dual-fuel energy tariff for a medium energy user paying by monthly direct debit was £1,067 a year in April, compared with £1,104 for tariffs with paper bills.

Find out more: Which? Switch – see if you could save money by comparing energy prices

Savings accounts

Avoiding online account management will hit how much you can save as well as putting up your monthly bills.

You’ll often lose out on interest if you need or want to use a branch account rather than one that can be managed only online.

When we checked in April, half of the 10 top-paying easy-access accounts were online-only – and six out of the 10 major savings account providers offered better rates on accounts with no branch access.

The difference was starkest with HSBC. Its Online Bonus Saver pays 0.75% interest, compared with its branch-accessible Flexible Saver, which pays just 0.1%. If you had £10,000 in savings, this would cost you £65 in lost interest over a year.

All of the banks and credit card companies we looked at provide regular paper statements for free, although you may be able to opt for paperless. However, many of them change for previous statements.  

Find out more: How to find the best savings account – advice on what to look for

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