British Gas customers can make an automatic annual saving of around £106 on their energy bills with a simple payment change. The major energy supplier, which serves around eight million homes and businesses across the UK, says customers can make significant savings simply by opting to pay bills by Direct Debit.
How Direct Debit payments work
According to British Gas, paying by Direct Debit works out cheaper as it gives customers access to lower unit rates, meaning you can make savings compared to paying on receipt of a bill. Fixed direct debits also help to spread your annual energy costs into 12 equal monthly payments, which can help to avoid paying huge bills during the winter, when households typically use more energy.
British Gas said: “Save £106 per year - pay by Direct Debit. Paying a fixed amount by Direct Debit is cheaper because the unit rates are slightly lower than what you currently pay. Login to your account to see what you could save if you switch to monthly Direct Debit.“Your bills are calculated based on the energy you use at home. So reducing the energy you use at home will help reduce your bills.”
Smart meters and payment reviews
The energy supplier also recommends using a smart meter to keep track of your energy usage throughout the day, as this can help identify where you can save energy, and in turn, money. British Gas added: “If you pay by fixed Direct Debit you’ll typically pay more than you’re using in the summer months and less than you’re using in the winter.
“We review your payments to keep you on track and notify you of any changes on your statements at least 14 days before the next payment is taken.“A smart meter can help you track how much gas and electricity you're using throughout the day and help you see where you could save energy.”
Upcoming price cap changes
The money-saving advice comes ahead of a hike to household energy bills from October 1 as Ofgem’s new price cap takes effect. The cap is due to rise by 4% on Thursday, increasing by £60 per year (or £5 per month) to £1,723 for a typical dual fuel household in England, Scotland and Wales.
The price cap limits the amount an energy supplier can charge for units of gas and electricity and it also impacts the standing charge, which is a daily cost per fuel type set by Ofgem. But the cap isn’t the absolute maximum price households will pay for energy as it is based on usage, so those that use more energy will pay more.
Early forecasts also indicate that bills will soar even higher from January, with analysts Cornwall Insight predicting the price cap will hit £1,872 per year from January to March, up 9% on October's level.
