Ways to pay your gas and electric bill

Since many Mumsnet users consider paying for energy as a high priority (Mumsnet energy use focus group, March 2024) - alongside rent, mortgage payments, and food - it's important that families know about and understand the most cost-effective, convenient ways of paying utility bills.

But with multiple payment methods available out there though, it can be overwhelming to choose the right one for you and your family if you're not sure where to start. The good news is that these days, the various methods available are relatively straightforward. The days of having a man appear on your driveway unannounced to take a meter reading are almost over. Instead, energy suppliers like Utilita Energy are making it much easier to keep track of the energy you're using and the money you're spending.

How you pay your bills can make a difference to how much you spend. Whether it's by direct debit or a prepayment meter - each method has its own advantages and considerations.

What are the different ways to pay your gas and electric bill?

We could start with the most common way to pay your energy bills - direct debit - but these days, with the cost of living crisis still looming over everyone's head, it's not always the most cost-effective way. In fact, ever since the phrase 'cost of living" swept across headlines in the UK, we've seen many Mumsnet users swap to pay as you go methods of payment over recent years in an effort to better track their usage and spending.

Smart pay-as-you-go

PAYG, also known as prepayment, is arguably the most cost-effective way to pay for your energy. Simply put, it means you pay in advance for your energy consumption before using it. Mumsnet users who have a smart PAYG meter consider theirs to be a useful budgeting tool, as they have greater visibility of their usage (Mumsnet energy use focus group, March 2024). To track your usage, you'd need a smart meter in pay-as-you-go mode.

You might already have a smart meter in credit mode (ie you pay by direct debit). If this is the case, you can contact your supplier, like Utilita Energy, and ask to start paying as a PAYG customer. Then, you'll be able to top-up online, via your supplier's app on a smart device or over the phone with ease.

Smart PAYG meters use modern smart meter technology and are often part of something called an 'advanced metering infrastructure' or AMI. Having a smart PAYG meter means you can access more detailed information about your energy consumption, including real-time data and historical data. Depending on your supplier, you can also setup low-credit alerts so you avoid being cut off by accident.

Pros of smart PAYG

Budgeting and cost control
Increased awareness of energy usage to prevent overconsumption
Reduced risk of debt from unpaid utility bills
Convenience of remote or various payment channels for top-ups
Flexible payment methods and access to special tariffs

Cons of smart PAYG

Risk of service disconnection if not topped up in time
Lack of billing history for tracking energy consumption patterns with some providers

Traditional pay-as-you-go

The main differences between smart and traditional PAYG meters lies in the technology used and the features they offer. Traditional PAYG meters are older, legacy prepayment meter systems that require physical meter top-up cards.

These need to be taken to a PayZone or Paypoint location to top up. They have limited functionality and typically only display the remaining credit balance. Customers also need to be physically present at the meter to top it up or check the remaining balance.

Pros of traditional PAYG

No risk of accumulating debt for unpaid bills
Helps with budgeting and controlled energy spending
Promotes awareness of energy consumption
No need for credit checks or deposits

Cons of traditional PAYG

Inconvenient physical top-up process (e.g., buying cards/tokens, going to utility office)
Risk of service disconnection if not topped up in time
Limited visibility into energy usage patterns and billing history
Potential for overconsumption leading to frequent top-ups
No remote communication or smart features
May require separate meters for different utilities (e.g., electricity, gas)
Limited flexibility in payment options and tariff structures

But which one is better? While both traditional and smart PAYG meters require prepayment for your utilities, smart PAYG meters use modern technology to offer more convenience, flexibility, and energy management features to customers, enabling better control and awareness of their energy consumption.

The best ways to pay your gas and electric bill

Direct debit (monthly or quarterly)

The most common way to pay for energy bills is through direct debit. With this payment method, you authorise your bank to release a fixed sum on the same date every month or quarter to cover the cost of your energy usage.

Not only does this method remove the stress of remembering to make payments, but it also allows you to build up credit in your account that can last over the winter months and help you to avoid huge, shock bills.

Pros of direct debit

Convenient, automatic payments eliminate the need to remember due dates
Direct debit ensures on-time payments, avoiding late fees
Some utility providers offer discounts for direct debit payments
Consistent, predictable payments can help with budgeting
No need to write cheques or manually make payments

Cons of direct debit

Insufficient funds can lead to overdraft charges
Payments are automatically deducted, regardless of personal cash flow
Incorrect billing amounts may be deducted without notice
Cancelling direct debit arrangements can be a hassle
Providing bank account information may raise security concerns for some
Direct debit may not accommodate variable usage or budget changes easily

Pay upon receipt of a bill

Prefer hard copies of your bills? You can choose to pay for your gas and electricity upon receipt of a bill.

You'll receive a bill at the end of each month or quarter. This could be accurate or estimated as the bill is based on meter readings, your typical use, seasonal trends and energy prices. This method offers convenience as you can pay online, by post, or in person at the Post Office.

However, you must ensure you settle your bill before the supplier's deadline to avoid late payment charges

Pros of paying upon receipt of a bill

Flexibility in payment timing
Ability to review and verify charges before paying
No need to provide bank account or credit card information
You may get a discount for speedy payments
Convenience of paying online, by post or in person at the Post Office

Cons of paying upon receipt of a bill

Risk of forgetting or missing due dates
Potential late payment fees if not paid on time
No option for automated or recurring payments
May require more effort to make manual payments each billing cycle
Lack of predictable, consistent payment amounts

A guide to managing your energy bills

Managing your energy bills needn't be complicated. Following a few simple steps can help you to stay on top of your energy usage that'll help avoid any surprises when your bills arrive.

You'll need:

Your account number and sort code
Your customer account number

If you haven't already, consider setting up an online account with your energy supplier, as this will provide convenient access to your billing details, meter readings, and payment history.

1. Understanding your energy usage

To effectively manage your energy bills, it's good to have a clear understanding of your family's energy usage. Not only will this help you make an informed decisions about your payment option, but will also help you to identify any opportunities for energy savings.

Having a smart meter (whether you're a direct debit customer or PAYG) will give you a better idea of how much energy you're using on a daily basis and how much it's costing you.

2. Set up your payment plan (and stick to it)

If you're a direct debit customer, you should contact your energy supplier to share your bank details and authorise the fixed sum payment on a monthly or quarterly basis. Make sure you understand the T&Cs of the direct debit guarantee, which protects you from errors or unauthorised charges.

For prepayment customers, ensure you top up regularly to avoid running out of gas or electricity. Suppliers like Utilita Energy allow you to set up alerts on your account or app that'll remind you to top up when needed. Pick a routine, set up alerts and reminders, and avoid being cut off because you forgot to top up.

For those of you paying upon receipt of a bill, you should familiarise yourself with the payment deadlines. Consider setting up reminders or automatic payments to ensure you don't miss any.

3. Monitor your bills and usage

Many energy suppliers like Utilita Energy offer online accounts where you can access your billing details, meter readings, and payment history. Take advantage of these resources to stay informed about your energy usage and spot any unusual patterns or discrepancies.

Tips for reducing your gas and electric bill

Reducing your gas and electric bill doesn't have to be complicated. By making a few simple changes and investing in energy-efficient appliances, you can save money and reduce your energy consumption.

1. Upgrade to energy-efficient appliances: Investing in energy-efficient appliances can significantly reduce your gas and electric usage, leading to lower bills in the long run.

2. Improve insulation: Properly insulating your home can help retain heat in the winter and cool air in the summer, reducing the need for excessive heating or air conditioning.

3. Use smart thermostats: Smart thermostats allow you to control your heating and cooling more efficiently, adjusting temperatures based on your schedule and habits.

4. Unplug electronics when not in use: Even when turned on low power mode, electronics still consume energy. Unplugging them when not in use can help reduce your electricity bill.

5. Utilise natural light: While harder said than done during a UK winter, when you're able to, take advantage of natural light during the day to reduce the need for artificial lighting, saving on electricity usage.

6. Wash clothes in cold water: Heating water for laundry contributes to a significant portion of energy usage. Washing clothes in cold water can help lower your gas and electric bills.

What to do if you're struggling to pay your bills

If you're struggling to pay your gas and electric bills, there are resources available to help in the UK.

1. Firstly, contact your energy provider: Many companies offer payment plans or assistance programs for customers facing financial difficulties. For example, Utilita Energy offers up to £15 Emergency Credit per smart meter if you're struggling to top-up.

2. Seek government assistance: There are various government programs that provide financial aid for energy bills, especially for low-income households. For example, individuals who receive benefits can use some to pay their bills and those born before 1957 can access the government's Winter Fuel Payment.

3. Budget and prioritise expenses: Create a budget to manage your finances effectively and prioritise essential expenses like utilities.

4. Energy-saving assistance programs: Some organisations offer free home energy assessments and assistance with weatherisation to help reduce energy costs. Plus, companies like Utilita Energy can help you to access UK government schemes like The Green Deal, which aims to help people invest in renewable energy and energy efficient products. Such schemes offer loans to cover the costs for home improvements such as new boilers, wall insulation, heating controls and hot water systems. Repayments for the loans are then made through your electricity payments.

5. Community resources: Local charities, councils and non-profit organisations like Citizens Advice may provide support for individuals struggling to pay their gas and electric bills. They often have resources available to help with utility bills, such as emergency assistance funds or energy-saving tips.

Government assistance and grants for families in the UK

Winter Fuel Payment: provides an annual tax-free payment to eligible individuals of State Pension age
Cold Weather Payments: offers additional support during cold weather conditions.
Warm Home Discount: eligible households can receive a rebate on winter electricity bills and is based on household income and other criteria.
Fuel Direct Scheme: allows some of your bills (including energy, water, and rent) to be paid directly from your benefits, helping you to budget and ensure your energy bills are covered.

Do you need to take a meter reading? Here's how to do it

Regular meter readings are essential for accurate billing and understanding your energy usage. If you're on a payment plan that requires you to take your meter reading, this is how you accurately do so:

To read your meter:

For traditional meters, you should read dials/numbers left to right, noting red numbers (ignoring those in black)
For smart meters, note down the figures shown on your digital kWh display.

To submit your readings (if you pay by cash, cheque,

Online account, email, phone, or supplier's designated method
Have account number ready
Double-check your readings for accuracy

By regularly submitting your meter readings when needed depending on your payment method, you'll ensure accurate billing and avoid any surprises on your energy bills.

Could you save money by switching providers?

If you're looking to reduce your gas and electric bills, switching energy providers may be worth considering.

Comparing gas and electric rates is an important step in finding the best deal for your energy needs. Start by gathering information on the rates and tariffs offered by different energy suppliers. Consider factors like the unit rates, standing charges, and any additional fees or discounts offered by each supplier. Look for fixed-rate tariffs that provide stability and predictability in your energy bills.

When comparing rates, you should also take into account your household's energy consumption to ensure you're accurately comparing the costs.

The process of switching suppliers

Switching energy suppliers is a straightforward process that can potentially save you money on your gas and electric bills.

Start by comparing rates and tariffs from different suppliers
Choose your supplier and the tariff that best meets your needs
Contact them with your current supplier details and your meter reading, your new supplier will then initiate the switching process

During the switch, there should be no disruption to your energy supply, as it is regulated by Ofgem. Your new supplier will handle the transfer and inform you of any necessary steps or actions required on your part.

Paying for gas and electric: frequently asked questions

What's the most cost-effective payment method for energy bills?

The most cost-effective payment method for energy bills may vary depending on your circumstances. Direct debit is a popular option as it automates the payment process and allows you to build up credit in your account. Whereas smart prepayment allows you to monitor your energy and spend more efficiently.

Can I switch energy suppliers if I owe money?

Yes, you can switch energy suppliers even if you owe money. However, your new supplier may conduct a credit check before approving the switch. If you're in debt, it's recommended to discuss your situation with your current supplier and work out a repayment plan.

Once you've reached an agreement, you can proceed with switching suppliers and continue paying off your debt according to the agreed plan.

What should I do if my energy consumption seems unusually high?

If you notice that your energy consumption seems unusually high, it's important to first check your meter reading.

An accurate meter reading will help determine your actual energy usage and prevent estimated bills, which may lead to overpayment or underpayment.

If there is a significant increase in usage, it could be due to a faulty appliance or insulation issues. In such cases, it's advisable to consult with an energy professional to identify and resolve the problem.

Are there any benefits to paying my bills online?

Paying your bills online offers several benefits. By setting up an online account with your energy supplier like Utilita Energy, you can conveniently manage your payments, view your energy usage, and check your spending.

Online payments through your bank account provide a secure and immediate way to pay, ensuring you stay on top of your finances. Utilising online payment methods such as direct debit can also provide peace of mind, as payments are processed automatically and you don't have to worry about missing due dates.

About Utilita

A REVOLUTIONARY PAYG EXPERIENCE. Utilita is the UK’s only energy supplier created to help households make their energy spend go further, by revolutionising the PAYG experience. By improving visibility and control through industry-leading digital technology, Utilita households have energy back in their hands.

NO USE, NO CHARGE. Utilita is the ONLY energy supplier that DOES NOT apply a standing charge when households use no/low amounts of energy, based on principle. Instead, Utilita applies a two-tiered tariff.

ONLY SUPPLIER TO LOOK YOU IN THE EYE. Utilita is the only energy supplier with 12 High Street Energy Hubs situated in UK town centres, enabling anyone - not just customers - to have conversations about their energy usage, affordability, and learn about ways to save energy at home.

Visit Utilita here

About the author

Rebecca Roberts is a writer, editor, and content marketing expert hailing from Leeds. Here at Mumsnet, she brings parents content designed to make life easier. Beyond her role as an editor here at Mumsnet, Rebecca can be found balancing life as a working mum of two toddlers and when she’s not at her desk, you’ll likely find her at a local playgroup, in a nearby coffee shop, or walking the dog.