Newspaper article The Evening Standard (London, England)

Banking on Bargains; HOMES AND PROPERTY;For Convenience and Great Savings, Pay Your Bills by Direct Debit

Newspaper article The Evening Standard (London, England)

Banking on Bargains; HOMES AND PROPERTY;For Convenience and Great Savings, Pay Your Bills by Direct Debit

Article excerpt


For convenience and great savings, pay your bills by direct debit

SAVING money on household bills is one of those things that we all know makes sense but seldom get around to doing. Find the time, however, and the results can be impressive. The average householder could cut costs by around [pound]138 a year by simply switching bills to direct debit rather than sitting down each month to write cheques - always a depressing chore anyway.

One advantage of paying gas, electricity, telephone, TV licence and council tax bills by direct debit is that you can spread the cost evenly over the year rather than having a crisis every quarter when the bills all arrive together.

In some cases you can even stipulate on which day of the month the bill is paid to ensure the money is not debited from your bank account before your salary has been paid in.

"Taking a sample of 10 core bills ranging from council tax to utility bills, most households can save around [pound]135 a year if they switch to direct debit," says Peter Blake of Direct Debit.

Another advantage is that you will be notified in advance of any changes to payment dates or amounts. And you are entitled to an immediate refund from your bank or building society if money is deducted from your account in error.

Over 500 companies accept payment by direct debit and, with more than 20 per cent of all new arrangements being finalised on the telephone, over the internet or face to face, there are very few confusing forms to worry about.

Some 75 per cent of households now see direct debit as the most efficient way to pay household bills, with more than 32 million people in the UK making it their preferred method of payment.

Some discounts are worth having.

London Electricity, for example, offers a discount of [pound]10 at the end of the year, or 3 per cent off the annual bill, for customers paying monthly by direct debit.

Eastern Energy offers 3 per cent off both unit and standing charge for those who pay quarterly, with a 5 per cent reduction for those who pay monthly.

Seeboard offers an annual reduction of [pound]8 for those paying by direct debit, while one of the best savings is an 8 per cent discount for those using Southern Electric for both gas and electricity. If you have a large house to heat, this could result in substantial reductions.

British Gas's discounts are also generous: cost per kilowatt-hour is reduced from 2.396p to 1.84p, while those who pay quarterly also qualify for an early payment discount, providing a 30 per cent reduction (up to a maximum of [pound]7.50) off the next bill.

Southern Electric Gas offers customers 5 per cent off annual bills for those paying monthly by direct debit, while the unit charge is also reduced from 1.36p to 1.28p. London Electricity Gas reduces the unit charge from 1.16p to 1.115p, with the standing charge cut from 10p to 9. …

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