Money Saving Expert Martin Lewis has some stark advice for anyone paying their energy bills via direct debit.
The money guru appeared on This Morning to warn bill-payers not to ditch their direct debit payments.
During a phone-in on Tuesday (January 17), Martin answered a question from OVO customer Claire who was wondering whether she should pay on the app instead.
Speaking from his home, Martin said: “I would caution you against this.
“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.”
Money Saving Expert Martin Lewis: ‘Don’t cancel direct debit’
Martin explained that there are plenty of online calculators consumers can use to figure out if they’re paying the right amount or not.
The Money Saving Expert 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 to 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 in receipt of bills. This is what most people do when they cancel direct debit.
“This is around 8% more expensive. You will pay 8% more on top of the already huge rates to pay your bills,” he warned.
Martin explains energy bill payments
The star added that some energy providers offer variable direct debits instead.
He explained: “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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