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Ways to pay for electricity and gas

Ways to pay for electricity and gas

There are 5 common ways to pay for electricity and gas used over a period of time:

Direct Debit

A set amount is deducted from your bank account every month on the same date of the month, based on the supplier's estimate of your annual usage.

Prepayment meter

You pay for fuel as it is used by topping up an electricity key or a gas card at a Post Office or a PayPoint or a Payzone and inserting the key or card into the meter.

Periodic billing

The supplier sends you a bill (usually every 3 months) for the fuel used in that time.

Card payments/budget scheme

The supplier sends you a plastic payment card so you can pay a set amount every week, fortnight, or month, based on estimated annual usage. Many suppliers are reluctant to offer this payment method and you have to ask specifically for it. You should check how it operates as some suppliers are more flexible than others about payment dates.

Fuel Direct

The Department for Work and Pensions (DWP) and the supplier organise payment of ongoing fuel usage and debt to be deducted directly from your benefits. This payment is only available if you are in arrears and on certain income-based benefits (Income Support, JSA, ESA, Pension Credit or Universal Credit).

Payment methods vary in price

• Monthly Direct Debit is the cheapest
  • Many deals are available solely with this and some of the very cheapest deals also require energy accounts to be managed online
• Prepayment meters are the next cheapest
• Periodic billing, card payments and Fuel Direct are the most expensive

OFGEM has introduced a cap on the price of electricity and gas for those with prepayment meters. It is designed to reduce the difference in price between prepayment customers and those paying by monthly Direct Debit.