Could you save almost £250 a year by scrapping paper bills and going direct debit?
It always used to be the case that those technologically-savvy sorts who wanted to pay by direct debit or service their account online got a discount for being so clever. Now, of course, it is the Luddites who still want paper who instead face a premium on their bills, despite the fact that Which!!! reckon that almost 60% of their members say they “have concerns” about managing bills online, with nearly half saying they find it easier to track their finances with paper bills. So just how much extra are you paying if you want, or need, those paper statements?
Which!!! totted up the extra costs faced by customers who paid for their broadband bundles, mobile phones and energy by bank transfer and received itemised paper bills, and reckon that these customers are paying up to £243 a year extra. They also decided to ‘name and shame’ the companies who have the largest penalty prices for paper customers, who are clearly charging over and above the additional admin cost of printing off statements.
Virgin Media customers who don’t pay by direct debit could pay up to £60 a year extra, plus £1.75 a month for paper bills. That's an additional £81 on an annual bill. Virgin told us it provides a variety of payment options and continually reviews its charges.
TalkTalk doesn’t even give new customers the choice to pay by bank transfer – anyone signing up is forced to pay by direct debit. TalkTalk said most of its customers pay online and claimed it offered more ways to pay and to save money on bills 'than any other broadband provider'.
If you're on the Three network and you don’t pay by direct debit or arrange a continuous payment authority from a credit or debit card you will pay an extra £49 a year. EE and Vodafone charge non-direct debit customers £42 more a year. On top of that, EE, O2 and Three charge customers £1.50 a month for paper bills; Vodafone an even more (slightly)expensive £1.54.
Although it is harder to compare additional costs of energy services, given they are normally built in to different tariffs, Scottish Power's standard tariff with paperless billing and direct debit is £95 a year cheaper than the equivalent tariff with paper and non-direct debit options, with the average premium cost of a paperless tariff being £37.
And it’s not just services- Which!!! found that half of the 10 top-paying easy-access accounts were online-only - and six out of the 10 major savings account providers offered better rates on accounts with no branch access- top penaliser here was HSBC whose Online Bonus Saver pays 0.75% interest, compared with its branch-accessible Flexible Saver, which pays just 0.1%- that would equate to a massive £65 loss in interest if you had £10,000 in savings.
So how much could you save by going paperless and using direct debit? Or do you feel it is unfair that you are penalised for choosing to manage your bills differently?