The founder of MoneySavingExpert warned households that switching from direct debit to quarterly payments is likely a mistake as it means energy companies can charge you more
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martin lewis has warned that skipping direct debits to pay energy bills could mean you could end up shelling out even more.
Households are facing a staggering increase in energy bills starting today as the maximum amount businesses can charge off standard tariffs is Average increase of £693.
Many Brits who pay for energy by regular direct debit may be considering ending this to give them more control over their spending by switching to quarterly bills.
They may also have been concerned by news that some energy companies are expanding direct debit payments.
But in one Video money saving expertLewis said: “I know a lot of people are thinking about giving up direct debits right now because they want to control what they’re going to pay by having a bill that comes in and then paying it afterwards, rather than trading usage estimates.”
“I recently presented evidence to Parliament that I believe some energy companies are artificially inflating direct debits well beyond the 54 percent price cap hike to support their cash flow and this needs to be clamped down.”
The price cap set by regulator Ofgem caps how much an average household will pay for a variable rate energy deal when direct debit is used.
That cap increased by an average of 54% today, or £693 a year.
Lewis added: “But if you’re thinking of posting your direct debit, I have to draw your attention to something. While you can gain control, it will cost you more.”
Someone paying average energy consumption by monthly direct debit would have a price cap of £1,971 per year from today.
If you were to abandon direct debits and switch to quarterly bills, that cap increases to £2,100 per year.
“That means you’re paying over 6% more than direct debit for the same usage because there’s a discount for direct debit,” Lewis said.
“I can’t tell you what to do, but if you can handle direct debit, it’s cheaper to do it.”
https://www.mirror.co.uk/news/uk-news/martin-lewis-explains-your-energy-26614676 Martin Lewis explains why your energy bill could go up if you don't use direct debits