Martin Lewis has warned consumers that their energy bills could go up even further if they ditch direct debit payments.
Gas and electricity costs have soared, with almost £700 added to the average annual bill from April 1.
1
More than half of consumers pay their energy bills by direct debit, according to industry regulator Ofgem.
But the MoneySavingExpert founder said households might be thinking about switching their payment method to control their finances.
That’s because direct debits are based on estimates of usage, and comes after suppliers were accused of hiking bills by disproportionate amounts.
However, as The Sun has previously reported, it is the cheapest way to pay.
“If you’re thinking of ditching your direct debit, I do need to make you aware of something,” Martin said in a MoneySavingExpert video.
“While you may gain control, it will cost you more.”
Following Friday’s rise, the price cap for customers who pay by direct debit is £1,971, based on typical energy usage.
But if you use a prepayment meter, it’s £2,017, and if you want to pay quarterly it is £2,100.
Most read in Money
That means you could be paying more than £100 a year extra if you ditch direct debits.
Martin added: “I can’t tell you what to do, but if you can cope with the direct debit, it is cheaper to do so.”
Before the price hike, the personal finance guru told MPs that there were “worrying issues” over energy companies increasing customers’ direct debits – and even for those in credit.
The price cap jumped by 54% on Friday but energy firms have reportedly been doubling direct debit payments.
Martin told a government committee last month that bill increases were not always proportional to that rise, and some were increasing by more.
He told the Business, Energy and Industrial Strategy (BEIS) Committee: “There is no reason to double someone’s direct debit when they’re in credit and the price cap is going up 54%.
“The amount [of suppliers] playing fast and loose that seems to be going on is huge right now.
“We need to crack down and we need to be much tougher with firms that do this.”
What help can I get with my energy bills?
If you’re struggling with your energy bills, there is help available.
Your first step should be to contact your energy supplier.
They may be able to change your payment plan or check if you’re eligible for their hardship fund.
For example, British Gas and Octopus have both set up funds to help customers who are struggling with their bills.
British Gas announced last week that it has added an extra £2million to the pot of cash set aside to help customers.
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 grants that can help you pay for gas and electricity bills.
The government recently announced an extension to the Household Support Fund to help families with the rising cost of living.
Contact your local council to find out what support is available in your area.
Finally, one of the best ways of saving money is to make your home more energy efficient.
Check whether you can reduce your energy use with a simple trick such as putting foil behind your radiator.
We pay for your stories!
Do you have a story for The Sun Online Money team?
