How can I pay for my energy?

There are several ways that you can pay for your energy usage such as:

• paying weekly, monthly or quarterly by cash or cheque
• monthly or quarterly direct debit
• using a Prepayment meter or in some cases through the Fuel Direct scheme

You can also have the option of managing your accounts online. You should ask your supplier to tell you of all of your options so that you can make the best choice for you.

Some methods of payment may be more expensive than others, with discounts offered when you pay using certain methods, eg direct debit discount. It is usually cheaper to manage your accounts online or pay by monthly direct debit than to pay by cash or cheque on a quarterly basis.  Some suppliers will add a daily standing charge to your bill and others do not. Those companies that do not add a standing charge may instead ask for a higher unit price for the gas and electricity you use.

What method of payment is the right one for me?

If you have a credit meter installed in your property you can pay for your usage in several ways:

Monthly Direct debit

You can spread your payments throughout the year by paying by monthly. Payments are taken directly from your bank account at either a fixed or variable rate. Most monthly direct debit rates are set at a fixed rate, which your supplier should review at least once a year based on your actual consumption, to make sure that you are paying enough or that you are not paying too much. Your supplier must tell you before they change the amount of money they take from your bank account.

Your energy supplier must ensure that your monthly direct debit payment levels are clearly and accurately explained and based on the best information available to them. Suppliers also need to justify why they are retaining any credit that builds up on your account.

When calculating your monthly direct debit amount your supplier should consider:

• How much energy you used in the last year
• Any price or product change that has taken place since your last review, such as the end of a fixed price tariff contract
• Any existing balance that may be on your account

Variable/Quarterly Direct Debit

Variable or quarterly direct debit allows you to pay your bills directly from your bank account every quarter rather than paying a set amount every month. You will have to pay the full amount of the balance on the account if you use this method of payment. Some suppliers will offer you a discount if you use this payment method.

Quarterly billing

You can opt to pay for your energy on demand on a quarterly basis. Your supplier will send you a bill charging you for the energy that you have used over the previous three months. Quarterly bills can be paid for in a number of ways including:

• Cash
• Cheque
• Direct debit
• Debit/credit card

If you pay these bills promptly (usually within 10 or 15 days) you may qualify for a discount.

Pre payment meter

If you prefer to pay for your energy as you use it a pre payment meter may be the best option for you. Prepayment meters offer you the opportunity to pay for fuel in advance. Fuel is paid for at authorised payment outlets such as a post office or Pay Points in local shop sor newsagents. In exchange for payment, you will receive credit, either on a card, key or as a token, which you have to place into the  meter. Once this credit has been received, the meter automatically allows energy to be used. As energy is used, the credit runs down. For energy to be available, you must ensure there is always enough credit on the meter.

It is worth remembering that while the advantage of Prepayment meters are that you never receive an unexpected energy bill and you can budget better for your energy use.  Prepayment meters can also be unsuitable if you have mobility problems or if you are reliant on electricity for medical reasons eg to run breathing apparatus.

Fuel Direct

If you are in debt to your energy supplier and are in the reciept of the following benefits:

• Income Support
• Job Seekers Allowance
• Pension Credits
• Employment and Support Allowance

You can pay off your debt and pay for your ongoing energy consumption using Fuel Direct.  This is where a fixed sum (currently £3.25 ) will be removed weekly from your benefits by the Department of Work and Pensions and passed on to your energy supplier. Usually once you have paid off your debt you will no longer qualify for Fuel Direct, however in certain circumstances you may be permitted to remain on Fuel Direct to pay just for your energy consumption.