Direct debits can save you £200

THE average household could save more than £200 a year simply by paying their bills by direct debit, new research claims.

According to a report by the payment processing service, BACS, UK consumers who settle their utility bills by cheque or credit card are missing out on discounts worth around £1.1bn annually.

On average, we spend £26bn a year on utilities – gas, electricity and telephones – as a nation. This works out at around £3,132 per household. Yet fewer than half of all utility customers pay their bills by direct debit say BACS.

It is urging consumers to take advantage of the discounts offered by many companies to customers who pay by direct debit, to slash their annual bill by around £203 on average.

Yet although paying by direct debit can often save you a few pounds, it may not be for everyone. There has been concern in the past that some companies take a very long time to refund overpayments made by direct debit and there is no flexibility about when the payments can be made.

On the other hand, as Karen Darby, chief executive of consumer advice service Simply Energy, points out, paying monthly by direct debit can help to spread the cost and the pain of covering bills.

She said: 'Unfortunately some people have had bad experiences in the past and may have been put off to signing up to direct debit again, they could be missing out the best deals available, as most utility companies offer benefits to those who pay by direct debit.

'People should not just consider changing they way they pay their bills but should also shop around for a better deal to maximise the savings available. This is especially relevant for utility bills and particularly the gas bill.'

To find out how to cut your household bills by switching supplier click here

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