A small plug for direct debits: Nic Cicutti unearths a modest saving for electricity users unable to beat the VAT deadline by paying bills in advance

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ELECTRICITY users unable to beat the 1 April deadline and avoid paying this year's 8 per cent VAT charge on fuel can still make a small saving by meeting future bills by direct debit.

Regional electricity companies tempt customers with small discounts if they pay future bills by direct debit.

For example, the London Electricity Board is offering to cut about 1 per cent off the bill, by lopping a small amount of money off each unit used, plus a 25p discount on the service charge.

Manweb, in the north-west of England, discounts both its bills and the standing charge by 1 per cent.

Yorkshire Electricity will cut the annual bill by a flat pounds 5.

With South Wales Electricity, its 1.5 per cent discount means saving pounds 7.50 on a pounds 500 annual electricity bill.

The companies claim that paying by direct debit offers consumers even greater savings in time and money than their own discounts suggest.

David Sanderson, a manager at Bacs, the organisation that sorts out direct debit arrangements on behalf of banks and building societies, said: 'It is not just the most convenient way to pay bills.

'It is also the fact that one no longer has to remember about them every quarter. It also means not having to pay the bus fare to visit a showroom or pay the stamp to send off the cheque.

'Direct debit budget plans can also be set up, to allow a bill to be spread in equal instalments throughout the year.

'In effect, it means you will be in debit in winter and over-paying slightly in summer.

'At the end of the year, it should balance out. If you have been underpaying, then you agree a new monthly direct debit charge with the supplying company.'

Before any quarterly bill is levied by the electricity company from the user's bank account, it informs the customer of the amount of the charge several days in advance so they have a chance to query it before it has to be paid.

Mr Sanderson said gas users were at present unable to take advantage of similar discounts because the Gas Act 1975 does not allow gas companies to offer differential benefits of this sort.


Reductions to direct debit payers as at 1 April 1994

Eastern Electricity Lower tariff - about 1 per cent reduction of unit and standing charge

East Midlands Electricity Discount flat rate of 70p a quarter or pounds 2.80 pa

London Electricity Lower tariff - about 1 per cent off unit charge

Manweb Discount of about 1 per cent off unit and standing charges

Midlands Electricity Discount of about 1 per cent

Norweb Lower tariff - 0.7 per cent off unit and standing charges

Northern Electric Premier Payment Plan gives 1 per cent off bill, with guaranteed

minimum of pounds 3

Scottish Hydro-Electric Discount of about 2 per cent

Seeboard Discount of 75p a quarter or about pounds 3 pa includes quarterly payers

Southern Electric Discount of about 1.25 per cent off bill

South Western Electricity Discount of 1 per cent

Swalec Discount of 1.5 per cent off overall bill

Yorkshire Electricity Discount of pounds 5

(Photograph omitted)

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