Paying for your energy by Direct Debit
By Jim Fay•
A Direct Debit is an easy way to make payments for utilities like gas and electricity. We’ve covered the basics in this guide.
What is a Direct Debit?
If you pay monthly for a service, like a phone contract or gas and electricity, you’ll have the option to pay by Direct Debit.
Direct Debits are automatic payments, so it’s one less thing to remember each month. And if your bank card expires, your Direct Debit payments will carry on as normal, because a Direct Debit is linked to your bank or building society account, not your card.
Your bank or building society has to authorise a company to take payments from your account. This is called a ‘Direct Debit mandate’. And any company that offers the option to pay by Direct Debit goes through a careful vetting process, so you’re covered by the Direct Debit Guarantee.
The Direct Debit Guarantee
If there are any changes to the amount, date or frequency of your Direct Debit, the organisation will notify you (normally 10 working days) in advance of your account being debited or as otherwise agreed. If you request the organisation to collect a payment, confirmation of the amount and date will be given to you at the time of the request
If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society
If you receive a refund you are not entitled to, you must pay it back when the organisation asks you to
You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation.
What’s the difference between a standing order and a Direct Debit?
A standing order is when you ask the bank or building society to pay an exact amount to another account regularly, for example once a week or once a month. If you need to change the payment amount, or how often you pay it, you’ll need to get back in touch with the bank or building society and ask them to change it.
A Direct Debit gives a company permission to take payments from your bank or building society automatically on an agreed date. Unlike a standing order, the company you are paying can increase or decrease the amount of money they take from your account, or change the payment date if they need to. The Direct Debit Guarantee means they can’t make these changes without letting you know first.
What happens if you can’t cover your Direct Debit?
If there isn’t enough money in your account to cover your Direct Debit payment, the bank can refuse to make the payment and might charge you. Even if the bank allows the payment, your account might go overdrawn, which could mean you’ll have to pay overdraft charges and fees.
‘Going into your overdraft’ or ‘going overdrawn’ is when you pay out more than the amount in your bank account, and your account balance falls below zero. If you need to go into overdraft it's important to let the bank know in advance. This is called an ‘agreed’ or ‘authorised’ overdraft. If you go overdrawn without agreeing this with the bank first, it's called an 'unauthorised' overdraft, and you may have to pay a fee.
Setting up a Direct Debit with Bulb
If you’re able to make monthly payments, and you don’t have a pay as you go meter, a Direct Debit is the easiest way to pay for your energy. Paying this way means that you can split the cost of your energy into equal amounts throughout the year.
When you sign up to Bulb, we’ll send you an email to confirm your Direct Debit amount. Then we’ll take your first payment on the date you switch to Bulb.
Once you’ve made your first payment by Direct Debit, you can choose a regular monthly payment date that works for you.
Changing your Direct Debit payments to Bulb
With Bulb, you can manage your payments in your online Bulb account, or using the Bulb app. Just head to your payment settings to change the date your Direct Debit payments are taken, or change the bank or building society account you’re making them from.
We regularly review your account throughout the year to make sure you’re not paying too much, or too little. So when you go to your payment settings, you’ll also see a ‘suggested payment amount’. It might be higher or lower than the estimate we gave you when you signed up, depending on your energy usage.
Find out more about how we calculate your payments, and why we might suggest a new monthly payment amount.
If we need to increase your payments, we’ll always let you know in advance. And there’s no need to update your payment details when your card expires, because a Direct Debit is linked to your bank account, not your card.
Cancelling your Direct Debit when you leave Bulb
Cancelling your Direct Debit might seem like the obvious thing to do if you’ve started the switch to a new supplier. But if you’re leaving us, we'll use your Direct Debit to take a final payment or refund any remaining credit in your Bulb account automatically. So we recommend keeping it active until then. Once your final bill is settled, we’ll cancel your Direct Debit for you.
Other ways to pay for your energy
If you're not able to pay by Direct Debit or by topping up your meter, there are some other ways to pay for your energy. And if you’re finding your bills hard to manage, just let us know. It can feel overwhelming to fall behind on your payments, but there are lots of ways we can help if you are struggling to pay.