Martin Lewis shares simple direct debit check everyone should know

Get real time updates directly on you device, subscribe now.

TV money expert Martin Lewis has urged energy company customers who pay by direct debit and believe they may be being overcharged to use an online calculator to crunch the numbers.

Appearing on ITV’s This Morning with Philip Schofield and Holly Willoughby on Tuesday, Mr Lewis took a question from a viewer named Everett who said he had been paying out £1,681.98 per month to British Gas since November 2022 and had just learned that he was £3,600 in credit.

Assuming he was paying too much, he said he had approached the company seeking to make an adjustment and had been told they could not make a change for three more months until his rate of consumption had been assessed.

Mr Lewis said British Gas was within its rights to stipulate that period but added that individuals also have a right to a fair rate of direct debit, under the licensing terms and conditions applied to energy companies.

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

If the calculator concludes they are paying in excess, they should present that evidence to their supplier and request a revision to their direct debit, Mr Lewis assured him.

Should the calculator suggest he was not overpaying, the expert conceded that might feel “very frustrating”.

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

“You don’t want to be in debt, because you’ve built up the credit to get you through the winter, so it’s about going to do that calculation to see whether your direct debit is too high.

“I would advise anyone who thinks their direct debit is too high to actually do a proper calculation online first and then that tends to be really strong evidence when you go to the energy firm asking to lower your direct debit.”

Such calculators ask you to give a measure of your gas or electricity usage in kilowatt hours per year and select the region of the country you are living in to give an estimate.

Appearing on the same channel earlier this week, Mr Lewis advised another customer with Ovo Energy against ditching direct debit and moving to invoice-based payments on the assumption that paying for exact usage is preferable to being charged by estimate.

Questioning the wisdom of moving to monthly bills, Mr Lewis warned the customer that their decision might end up costing them more in the long run.

“The reason I say I don’t want you to cancel your direct debit is if you move payments into receipt of bills – that is what most people do when they cancel direct debits – that is around 8 per cent more expensive,” he said.

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

This is because those on direct debit typically pay the lowest gas and electricity rates because they are not paying exactly per unit, like those on prepayment meters or monthly bills are.

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

Agreeing with Manchester United striker Marcus Rashford that improving financial literacy was vital for Britain, he went on to warn that too few parents were in a position to impart sound advice to their children and that the subject had been insufficiently supported in schools by the UK government.