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22 Feb 2019
Adam Bate

How to pay your energy bill


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How to pay your energy bill?

There are lots of ways to pay your gas and electricity bills, such as paying by monthly direct debit, or you getting a bill every quarter, which you can then pay by cash or cheque. Another option is to pay for your energy in advance with a prepayment meter – again, there are lots of different options, and you can top up your prepayment meter using a payment key, tokens or cash.

Most households find that a fixed, monthly direct debit works best for them. As well as helping with your budget, paying by direct debit can often mean your energy supplier will give you a discount on your bills. Other payment methods, like prepayment or quarterly billing, don’t come with this discount, and so you can end up paying more than you need to.

Bill payment methods

Direct debit

A direct debit is a great way to make sure you pay your energy bill payment is taken on time, and you can opt to make either monthly or quarterly payments.

With a monthly direct debit, your gas and electricity payments will come out of your account around the same time every month, and you’ll need to make sure your payments are enough to cover your monthly bill. 

Even though you pay a set amount, your bill will still fluctuate depending on how much energy you’ve used each month, especially as the seasons change, so it’s unlikely that your payments will match the exact amount of your bill.

This means you’ll either be overpaying or underpaying - if you regularly overpay, you’ll build up credit on your account with your energy supplier. You can either leave the extra money in your account to cover the months when your bills go up because you’re using more energy, or your direct debit can start to come down. If you switch to a new supplier while your account is in credit, you can claim the money back.

If you regularly underpay, you’ll build up a debt on your account, so your energy supplier will need to increase your direct debit to get you back in the black. If you owe a significant amount of money, your supplier can stop you switching to another company until the debt is repaid.

A monthly direct debit is usually the cheapest way to pay your energy bills, because suppliers often give you a discount for paying this way.

Quarterly direct debits work in the same way as monthly direct debits, except that payments go out every three months. Because the payments are less frequent, the amount will need to be higher, but in the long term, the cost is about the same. Some suppliers might offer a discount for paying by quarterly direct debit, but it’s unlikely to be as much as the discount for a monthly Direct Debit.

Payment on receipt of bill

This is when your energy supplier sends you gas and electricity bills every three months, and you pay when you receive them. Your bill will show how much energy you’ve used in the previous three months, and you can pay online, by cash or cheque at the bank, or over the phone.

Paying when you receive a bill is a good option if direct debits don’t suit you, but it’s more expensive because suppliers don’t usually offer a discount for paying this way.

Prepayment meter

Paying your energy bills with a prepayment meter means you use a top-up key or token to pay for your energy upfront. This is one of the most expensive ways to pay for your gas and electricity.

But, if you’re a landlord renting out a property, prepayment meters can help to make sure your tenants don’t run up a debt on the energy account. If you’re a tenant on a prepayment meter, and you’d like to switch to direct debit bill payments, then speak to your landlord.

Payment card

This is a flexible way of spreading the cost of your gas and electricity. If you’re using a payment card, you’ll need to top up your card at the Post Office or a PayPoint, and you can pay whenever you can afford to - weekly, fortnightly or monthly. This can be a useful way to keep on top of your budget, because no money is taken automatically from your account. All your payments are shown on your quarterly bill, and you’ll need to pay off any outstanding balance when you get your next bill.

One of the downsides of a payment card is that you can’t make payments online - you have to go to a Post Office or PayPoint. You also won’t get a discount, so it’s likely you’ll be paying more than if you used another payment method.

If you run a business from home, you may be eligible for a business energy contract, provided you can prove at least 50% of your gas and electricity usage is for business purposes. If this is the case, you can still pay your commercial energy bills by direct debit and payment on receipt.

How to get help paying your energy bills

If you’re struggling to pay your energy bills, there are some Government schemes that can help.

  • Winter fuel payment: An annual tax-free payment of between £100 and £300 to help with the cost of winter heating for those over pension age.

  • Cold weather payment: A £25 grant for people on qualifying benefits when the temperature in their area drops to 0°C or below for seven consecutive days.

  • Warm home discount: A £140 credit on your energy bill during winter, as long as you meet certain criteria and your energy supplier is signed up to the scheme.

  • Fuel direct: This lets you repay your debt directly from your benefits, to make sure your bill is paid and to help you manage your budget more easily. You may be eligible for Fuel Direct if you’re receiving Universal Credit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, and Pension Credit. 

How to switch energy supplier

The simplest way to cut the cost of your energy bills is to switch to a different supplier. 

To get a start on your energy price comparison, simply click the COMPARE button at the top or bottom of the page. For more information on how to switch, check out our energy switching guide.


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