Gas and electric Direct Debit: how it works
How does paying for energy by Direct Debit work?
When you switch energy supplier the new supplier will arrange your direct debit to cover what it expects your bills to be, based on the details you provided during switching. For example, you may have your direct debit set at £50 a month. This is added to your energy account each month, and when your supplier receives meter readings (it's recommended you provide them at least once a quarter) it will update your charges accordingly.
This process can leave you owing money (in debit) or having overpaid for your energy (in credit) when the real cost of your energy is calculated. If meter readings aren't supplied, the supplier will base your monthly charges on an estimated bill, which isn't accurate. It's a good idea to build up enough credit over the spring and summer when you're not likely to have the heating on so you're covered during the winter when you're using a lot of energy.
If you find that after winter you are left with a lot of credit, you may want to claim back any remaining money in your account or request to adjust your direct debit.
Is it cheaper to pay for energy by direct debit?
It's usually cheaper to pay for your energy by direct debit rather than on receipt of bill if you're on a fixed deal. This is because it costs suppliers more to manage accounts and admin for customers who don't pay by direct debit, so when people do opt for direct debit, they can lower the cost of energy slightly.
If you're on a standard variable tariff and subject to the price cap, though, prepayment is the cheapest way to pay for energy. This is because Ofgem and the government took steps to make standard tariff prepayment energy cheaper so prepayment customers aren't unfairly affected by the price cap. Under the October 2026 cap, the unit rates for electricity are as follows:
- Direct Debit: 26.32p per kWh
- Standard credit: 27.80p per kWh
- Prepayment: 25.52p per kWh
Why has my supplier increased my gas and electric direct debit?
When your supplier notices your direct debit is not covering the actual cost of your energy, it may increase the amount you pay each month. If you can't see any clear reasons why your direct debit has been adjusted, call your supplier and ask it to explain.
Suppliers may increase your direct debit amount over the winter months. The rates you are charged per unit of energy don't change, but the supplier increases the direct debit to cover any additional usage.
If I switch my bank account, will it be hassle to update my energy Direct Debit?
Your new bank or building society will transfer all regular and recurring payments to another bank or building society under the Current Account Switch Guarantee.
More information can be found about switching by asking a member of staff in any bank or building society branch. Most banks and building societies aim to complete the switch of your regular payments from your old account to your new account in around seven days.
If I switch supplier, what should I do about my energy Direct Debit?
When you switch supplier, you will be asked to set up your direct debit ahead of the date the new supplier takes over the supply of your energy. After paying off any final bills to your old supplier, you should cancel your direct debit as a precautionary measure to ensure you are no longer charged by it.
What will happen if I don't have enough money in my bank account to pay my Direct Debit?
If you don't have enough funds available in your bank account to pay your Direct Debit, then it may be returned unpaid. This could result in a charge from your bank to cover the additional administration. If this happens it is important to act quickly and make funds available in case the Direct Debit is re-presented for payment.
If you think that you may struggle to meet your Direct Debit payments, you should contact your supplier so alternative payment options can be explored.
FAQs
What happens if I cancel my energy Direct Debit?
It depends on your supplier and situation. If you have credit built up, your supplier may use that to cover your costs. Your supplier may also send you late charges or move you to a prepayment meter. Ultimately, you'll still have to pay your energy bill.
Do I have to pay energy bills by Direct Debit?
No - you can pay on receipt of bill or pre-pay, but these may be more expensive depending on your tariff.
