Should I fix my energy direct debit payments or switch to variable bills? | The Sun

MILLIONS of households that pay their energy bills by direct debit can choose how their payments are calculated.

The Sun spoke to two energy experts to find out whether it's best to fix your energy direct debits across the year or pay for your exact usage each month with variable bills.

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

But those who don't pay by direct debit on receipt of their bill will see their payments 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.

Those on prepayment meters will pay even more from October.

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However, customers of several firms have a choice over how theirdirect debits are set up:

• Fixed direct debits
• Variable direct debits

With a fixed direct debit, you'll pay a fixed amount every month. Your energy company will work out the cost of your energy for the year ahead and divide this into equal payments.

Most energy firms will use the average amount of gas and electricity used in previous years to calculate your monthly instalments.

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With a fixed direct debit you can spread the cost of your energy use without any surprises.

With a variable direct debit, you can choose to pay a varying amount every month or every quarter, depending on the energy you use.

You’ll pay for the energy you use, this means you'll likely pay more in the winter and less in the summer.

The Sun spoke to Justina Miltienyte, head of policy at Uswitch and Stephen Murray, energy expert at MoneySuperMarket to find out which method is best.  

Justina, said: "Most customers paying for their energy via direct debit pay a fixed amount each month.

"Typically, people build up credit during the summer months to cover the winter period where their usage is higher.

"In some cases, suppliers offer customers the option to pay via variable direct debit, where people pay only for the amount of energy they use each month.

"However, this offers less chance to build up credit towards their more costly winter bills."

Stephen said: “A fixed direct debit will spread the cost of energy more equally from month to month, which could help households to budget for the massive price hike.

"Variable direct make it more difficult to budget over winter when bills will be higher due to the increase in energy use."

Both experts agreed that paying your energy bills with a fixed direct debit amount is the safest bet to prevent any nasty bill shocks this winter.

What energy bill help is available?

There are plenty of energy grants and schemes open to help you out if you're struggling.

British Gas has recently confirmed that it'll pay its most vulnerable customers grants worth £750 to help with sky-high bills.

Ask your supplier what's on offer and how to apply, or check here:

• British Gas Energy Trust
• Bulb energy fund
• EDF's energy customer support fund
• E.on's energy fund
• Npower's energy fund
• Octopus Energy Octo Assist fund
• Ovo's debt and energy assistance
• Scottish Power's hardship fund

There's also a one-off fuel voucher from your energy supplier if you're on a prepayment metre.

If you're in debt there are plenty of services you can take advantage of and they offer free and friendly advice on how to manage debt.

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Most of them can offer you free guidance and help in person, over the telephone or online.

• Money Advice Service – 0800 138 7777
• Citizens Advice – 0808 800 9060
• StepChange – 0800 138 1111
• National Debtline – 0808 808 4000

They can also help you take the next steps if you need a debt management plan (DMP) to tackle your debt or an Individual Voluntary Arrangement (IVA). These are agreements for managing multiple debts.

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