Helping an older loved one manage their energy payments can be quite a puzzle, especially when multiple payment options are available. Direct debits, prepayment meters, paying on receipt of the bill—all of these have pros and cons that vary according to an individual’s lifestyle, financial situation, and comfort with technology. For Carents, choosing the right payment method can make day-to-day life less stressful, both for themselves and for the parent they support. Below is an in-depth look at each primary payment option to help you figure out the best approach.
1. Why Payment Methods Matter
Energy usage isn’t just about the cost per kWh or the standing charge. Sometimes, the way you pay can heavily influence convenience and how well your loved one can budget. For instance, a parent might be used to paying bills quarterly by cash or cheque. Meanwhile, you might prefer a set monthly direct debit for predictability. Whichever path is chosen, it should align with your loved one’s needs, ensuring they’re neither racking up unexpected debt nor paying more than they should.
2. Monthly Direct Debit
Direct debit is one of the most popular methods in the UK, offering convenience and often the lowest rates.
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Fixed Direct Debit: The supplier estimates yearly usage, dividing that into 12 equal payments. This simplifies budgeting—your older relative knows exactly how much goes out each month. However, if the estimate is high or usage changes drastically, they may accumulate credit or debt on the account. Reviewing this every six months or so is important.
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Variable Direct Debit: In this case, the energy supplier charges for the actual energy used during the billing cycle. This can be monthly or quarterly, depending on the plan. It’s more precise but can lead to higher bills in winter months when heating usage spikes. If budgeting is a concern, keep an eye on these fluctuations.
3. Pay on Receipt of Bill
Traditionally, many older households used to pay their bills once the paper statement arrived, often every quarter. This method can be helpful for those who prefer seeing the exact usage before paying. However, it can also mean occasional or unexpectedly large bills—particularly around winter—if usage is higher than expected. It’s also typically one of the more expensive ways to pay. Some suppliers charge extra for not using direct debit or online billing. Nonetheless, for someone who wants full visibility and control over exactly what they pay and when, “pay on receipt” can be comforting.
4. Prepayment Meters
Prepayment, also known as ‘pay as you go,’ might be suitable for those who wish to avoid any debt with their energy supplier. People top up using a key or card at local shops, Post Offices, or via an app, which then credits the meter.
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Advantages:
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No risk of unexpected big bills, as usage is paid for in advance.
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Potentially beneficial for those on tight budgets, since you physically cannot use energy if there’s no credit.
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Drawbacks:
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Tariffs can be slightly more expensive than standard direct debits.
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Keeping meters topped up may be challenging in cold weather or if the older person has mobility issues.
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If credit runs out unexpectedly, it can lead to disconnection from supply until topped up again.
If your loved one uses a prepayment meter, ensure they understand how to top up and where. You might also look into the Priority Services Register for additional support, like extra notifications or meter-reading services if they struggle.
5. Additional Payment Options
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Standing Order: Less common for energy, but some suppliers allow it as a variant of direct debit. It’s a fixed payment each month, but you, rather than the supplier, control the payment from the bank side. If usage changes significantly, this might lead to under- or overpayment.
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Credit/Debit Card Online: For tech-savvy older adults, many suppliers permit one-off online card payments. Good for those comfortable using the internet, but not ideal for those with limited digital literacy.
6. Budgeting Tips for Each Method
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Track Usage: Encourage frequent meter readings or installation of a smart meter to prevent inflated estimates.
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Seasonal Variations: Plan ahead for winter months, especially if using a variable direct debit or paying on receipt.
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Consider Energy Debt: If your relative is in debt, a prepayment meter or an agreed repayment plan might help them slowly clear arrears without risking sudden large bills.
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Seek Discounts: Some suppliers offer discounts for monthly direct debit or paperless billing—worth investigating.
7. Key Takeaway
No single payment method suits everyone perfectly. Fixed direct debits offer stability but can lead to overpayment if estimates are off. Prepayment meters ensure no debt accumulates but can pose top-up challenges. Ultimately, weigh up the older person’s lifestyle, budget, and mobility. As a Carent, you can also monitor how each payment plan is working, adjusting if needed. A simple conversation with the supplier can often switch plans and might even result in lower tariffs or a more convenient system. By placing your older relative’s comfort and budgeting needs at the forefront, you’ll help ensure they stay warm, secure, and worry-free about their energy bills.