Britons are losing out on £1.1 billion (1) a year by failing to pay for their key household and individual bills by Direct Debit.
New research from Bacs, the company behind the Direct Debit service in the UK, reveals one in 13 people (8% of the UK) are not making the most of Direct Debit discounts – and are spending millions unnecessarily.
In total, the nation spends £27.4 billion (2) per year on these utility bills – that’s an average of £2,050 per household but those paying by cheque fork out £2,515 on average for these bills. However, bill payers could save a maximum of £187 per household if they use Direct Debit to pay for these charges.
The biggest savings to be made are on gas and electricity bills – with the maximum discount available for gas coming to £65, closely followed by electricity, with the highest reduction totalling £40.
Michael Chambers, Managing Director Bacs, said “Direct Debits continue to grow in popularity yet millions of people are still not taking advantage of the many benefits available. In addition to being easy to set up and hassle free Direct Debit payments can also save you money through the discounts on offer."
However perhaps one of the greatest advantages it has over other payment methods is it gives customers complete peace of mind as they are protected by the Direct Debit Guarantee.“
For more information about Bacs and our services visit Bacs key facts.
Contact Bacs press office.
Notes
(1) This figure has been sourced from the annual Consumer Payments Survey conducted in 2004 by IPSOS (UK) Ltd on behalf of Bacs. This £1.1 billion figure is based on the total maximum saving available for each commitment (electricity, gas, telephone, cable/satellite TV subscription, motor organisation and health insurance) from all service providers throughout GB. Multiplying this figure to the total number of GB households/individuals not using Direct Debit gives the total amount that Britons are losing out on per annum by not paying Direct Debit. This includes the following household bills; electricity, gas, telephone and satellite and cable TV subscription and the individual bills, motor breakdown service and health insurance
(2) This £27.4 billion figure is calculated by taking the average expenditure per payment per household/individual and multiplying it by the total number of payments in a year for each commitment (electricity, gas, telephone, cable/satellite TV subscription, motor organisation and health insurance) across the whole of Great Britain. These are then added together to create the total annual spend in GB.
The average household spend on these bills per year is £2050 and breaks down as £1,505 on the household bills and £545 on motor breakdown membership and health. It assumes that only one person per household has a motor organisation or health insurance commitment.
Maximum savings available to Direct Debit bill payers
Average annual spend on bills paid by cheque broken down by region
The research
Consumer Payments Survey (CPS) was conducted throughout 2004 amongst a representative audience of GB adult population. This is a major continuous financial survey that has been run since 1988., and is used to provide a consumer-based measure of financial behaviour from a single data source. The survey provides 4,000 completed diaries and questionnaires per year each representing financial transactions over a 4-week period. In addition 7,000 phone interviews are completed annually.
Savings are based on the maximum discounts available on the market for GB households/individuals using Direct Debit if they switch to Direct Debit as a way to pay bills.
For more information about Bacs and our services visit Bacs key facts.
Contact Bacs press office.
Back to 2005 press releases Back to press releases