Is it better to pay energy bills monthly or quarterly?

While most people now pay their energy bills monthly, some suppliers still offer the option of bills sent quarterly. But is there any benefit of one payment method over the other?

Whether it’s better to pay your energy bills monthly or every three months depends on how you manage your finances and your payment method for your energy bill. However, you’ll usually find monthly direct debits are the cheapest option.

Most people now pay their energy bills by direct debit, with the money automatically taken from their accounts. Direct debits mean less hassle for both the customer and the supplier and reduce the risk of late payments. That’s why suppliers reserve their cheapest rates for direct debit customers.

Additionally, direct debits are calculated based on your annual energy usage, so you’ll pay the same amount on every bill. This prevents you from facing much higher bills over the winter, making budgeting easier.

While monthly direct debits are more common, some suppliers allow you to may quarterly. However, if you’re paying by direct debit, some of the argument behind quarterly bills – that you don’t have to remember to send them as often – is eliminated. 

Furthermore, quarterly payments make budgeting more difficult. Many people who receive their pay packets monthly prefer to pay monthly as well to make budgeting easier. They often schedule their energy direct debit to go out a few days after their paycheque is deposited in their account. 

Also, if you’re only paying every three months, your bills will necessarily be larger: likely a few hundred pounds. You’ll have to ensure you have enough money in your account to cover that bill, or you could be pushed into your overdraft when the direct debit is automatically taken.

It’s also generally cheaper to pay by monthly direct debit than quarterly direct debit. In fact, there are two different levels for the energy price cap for credit meters.

One level, the cheapest, is for those who pay by direct debit monthly. As of April 2022, this is set at £1,971/year for a dual-fuel household with typical use. But if you pay by quarterly direct debit, cash, or cheque, you can be charged more: up to £2,101/year for typical use. This is to reflect the highest cost of these payment methods for suppliers.

If you pay by cash or cheque, there likely won’t be a difference in your bills if you pay monthly or quarterly. As you have to post a cheque or make these payments in person at your bank or Post Office, it may be more convenient to pay quarterly rather than every month. However, quarterly payments mean each bill will be larger, so you’ll have to ensure you have that much money in your chequing account or available as cash.