Martin Lewis reveals the cheapest way to pay your energy bills – and you could save hundreds of pounds | The Sun

Martin Lewis reveals the cheapest way to pay your energy bills – and you could save hundreds of pounds | The Sun

MARTIN Lewis' MoneySavingExpert has revealed the cheapest way to pay your energy bills.

Depending on how you pay your energy bills, you could save hundreds of pounds.

The energy regulator Ofgem confirmed the new price cap last week, with the average bill set to rocket to £3,549.

But many people risk paying even more because of their chosen payment method.

Martin Lewis and his MoneySavingExpert team have revealed that paying your energy bills by direct debit is still the cheapest way to pay.

This is because the price cap depends on the payment method.

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Those who pay their energy bills by direct debit will see their bills increase by 80% from £1,971 to £3,549.

But those who don't pay for their energy by on receipt of bills will see their bills hiked from £2,100 to £3,764.

This means you could be paying £215 a year extra if you don't pay by direct debit.

MoneySavingExpert say that while ditching your direct debit may help with your cash flow, it will end up costing you more in the long run.

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Households who pay by direct debit will often get a discount too.

The discount is automatic and most suppliers will add a line to your bill to say it has been applied.

The Sun recently put together a handy guide to the full list of energy firms that offer a direct debit discount.

British Gas said its customers can save up to 7% on their bill if they choose to pay by direct debit.

On the average annual bill of £1,971 – that's a saving of £140.

If energy bills go up to £3,554 this winter, as is expected, that could mean a saving of £248.78.

Here is a list of the suppliers we know offer a direct debit discount:

  • British Gas – 7%
  • Utilita 6%
  • Shell – up to £48 per fuel type per year
  • Good Energy – £15 per fuel type per year
  • EDF – 6.6%
  • Ovo (discount level not known)
  • ScottishPower (discount level not known)

If you don't already pay by direct debit, you can easily switch to paying in this way – speak to your provider.

Not all firms offer a discount though, so if you are doing it to save money it's worth checking first.

Octopus and So Energy do not offer a discount for direct debit customers.

While the new price cap does not come into effect until October 1, Ofgem has warned that some suppliers could start to increase direct debits before then to spread costs.

How do energy direct debits work?

If you pay by direct debit you'll pay your provider a set amount every month – but this isn't actually your bill.

Your bill is the amount you're charged for your energy.

It's a combination of a standing daily charge and your metered energy usage.

It will be different every month, depending on how much you use.

By paying your direct debit ensures there is always enough money in your account to cover this changing cost and keep you in credit.

Energy firms estimate how much they think you'll use over the year and divide this by 12 to determine your monthly direct debit amount.

If you pay quarterly, the yearly estimate will be divided by four.

It's important to be aware that you might be paying for more than you're using at some points during the year and particularly over the summer.

This is because it's unlikely that you'll be paying to heat your home during the warmer summer months.

But this tends to balance out over the year and smooths out over the more expensive winter months.

It may be worth switching to direct debit to get the bill discount if you don't already pay that way.

Energy bill help

There are schemes offered by suppliers, local councils, charities and the government that could help.

If you're struggling with energy costs or other bills there are plenty of organisations where you can seek advice for free, including:

  • National Debtline – 0808 808 4000
  • Step Change – 0800 138 1111
  • Citizens Advice – 0808 800 9060

You should speak to your energy supplier in the first instance as they have schemes in place to help with bills and arrears, including hardship funds and grants.

For example, British Gas and Octopus have set up funds worth up to £750 to help customers who are struggling with their bills.

Your local council may also be able to help with cash and grants if you are struggling with bills through the Household Support Scheme.

You should also check that you're getting all the benefits you're entitled to.

Use an online benefits calculator to make sure you're not missing out on any extra cash.

Similarly, you can search for charity grants that help you pay for gas and electricity bills.

There's more help from the government on the way too, later in the year in the form of one-off cost of living payments worth as much as £1,500 depending on your circumstances.

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The £300 is on top of the annual winter fuel payment where those getting the state pension can get between £100 and £300 to offset the cost of keeping their homes warm over the colder months.

Low income households can get a one-off £150 payment under the existing warm home discount scheme – applications open in the autumn.

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