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Liverpool Echo
Liverpool Echo
World
Ryan Paton

This Morning's Martin Lewis warning to anyone who pays energy bills by direct debit

Martin Lewis issued a warning to anyone who pays energy bills via direct debit.

The Money Saving Expert provided financial advice on today's edition of This Morning. The consumer champion appeared on the show ahead of tonight's Money Show Live, which is focused on debt.

He took a call from an OVO customer named Claire, who was planning on cancelling her direct debit and pay on the app amid soaring costs. However, the Money Saving Expert explained why this is a bad idea.

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He said: "I would caution you against it. As long as you tell OVO you're cancelling your direct debit and changing your mode of payment then it won't affect your credit score because you're not missing any payments and you're in credit.

"The first thing you want to do is get your monthly direct debit the right amount." Martin pointed the viewer in the direction of handy online calculators on the Money Saving Expert website that help you work out if the direct debit is correct.

He added: "You then take it to OVO and discuss if your direct debit is too high. The whole point of the direct debit system is use more in winter, less in summer and you pay somewhere in the middle."

"The reason I say I don't want you to cancel your direct debit is if you move into payments into receipt of bills. That is what most people do when they cancel direct debits.

"That is around 8% more expensive. You will pay 8% more on top of the already huge rates to pay your bills."

Claire paid her energy bills with OVO and he urged her to tell the firm if she still plans to go ahead with cancelling her direct debit. Martin advised energy customers looking to cancel their direct debit to take a look at switching to variable direct debit.

The system is not offered by OVO, but Martin said most other energy firms enable customers to switch to the alternative payment method. He siad: "If you don't like what you're paying on direct debit and you want to take control of that and only pay for what you use.

If you can, you switch to variable direct debit which is the same price as monthly direct debit so you don't have the 8% increase. What that means is you either have a smart meter or you do meter readings each month and then they just charge you on how much you use.

"Of course that means your bills are going to be really, really high in the winter and much lower in the summer so you have to manage your own cash flow."

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