Martin Lewis shares simple direct debit checks everyone should know

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TV money expert Martin Lewis has urged customers of utility companies who pay by direct debit and believe they are overpaying to use an online calculator to calculate the numbers.

Appears on ITVs This morning with Philip Schofield and Holly Willoughby on Tuesday, Mr Lewis answered a question from a viewer named Everett, who said he had paid £1,681.98 a month to British Gas since November 2022 and had just learned he was owed £3,600.

Assuming he was overpaying, he said he approached the company to make an adjustment and was told they couldn’t make a change for the next three months until his consumption was assessed.

Mr Lewis said British Gas was entitled to set that period, but added that individuals are also entitled to a fair direct debit rate, under the license terms that apply to energy companies.

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“If you don’t think it’s fair then I’d present them with evidence for that,” he advised, telling the questioner to take their electricity and gas usage figures from last year to an online calculator to determine how that plays out. compares to the rate they really pay.

If the calculator concludes they’re overpaying, they should provide that evidence to their supplier and request a review of their direct debit, Mr. Lewis assured him.

Should the calculator suggest he wasn’t overpaying, the expert admitted that could be “very frustrating.”

However, he continued: “Remember, you want credit at this point in the winter.

“You don’t want to be in debt, because you’ve built up the credit to get through the winter, so it’s about making that calculation to see if your debt collection isn’t too high.

“I advise anyone who thinks their collection is too high to first make a good calculation online and that is often very strong evidence if you go to the energy company to ask to lower your collection.”

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Such calculators ask you to measure your gas or electricity consumption in kilowatt-hours per year and select the region of the country you live in to provide an estimate.

Appearing on the same channel earlier this week, Mr Lewis advised another Ovo Energy customer not to abandon direct debit and move to bill-based payments, assuming that paying for exact usage is preferable to an estimate.

Mr. Lewis questioned the wisdom of moving to monthly bills and warned the customer that their decision could cost them more in the long run.

“The reason I’m saying I don’t want you to cancel your direct debit is that if you move payments to receiving bills — which is what most people do when they cancel direct debits — it’s about 8 percent more expensive,” he said. he. .

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“You pay 8 percent more on top of the already huge rates to pay your bills.”

This is because people with direct debits typically pay the lowest gas and electricity rates because they don’t pay exactly per unit like people with prepayment meters or monthly bills.

Also during his performance on This morningMr. Lewis advised clients on securing fixed interest rates for the first six months of fixed term mortgages, the best savings account for kids, getting professional help with debt and passionately endorsed the need for children to be taught in schools about personal finance .

He agreed with Manchester United striker Marcus Rashford that improving financial literacy was vital for Britain, further warning that too few parents were able to give sound advice to their children and that the subject was becoming insufficient in schools supported by the British government. .

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