What are the Ofgem direct debit changes in 2026?

Ofgem’s 2026 direct debit changes are designed to make payment plans fairer and more transparent, reducing the risk of large credit balances or unexpected catch-up payments. In practice, suppliers may adjust how they calculate fixed monthly direct debits, when they review them, and how they explain increases. If your supplier changes your monthly amount, you should be given clear reasons and options to discuss or amend your plan. If you want help reviewing your payments and tariff options, compare plans at https://www.energyplus.co.uk/.

Will my monthly direct debit increase in 2026?

It might, but not automatically. Your direct debit can change if your usage changes, unit rates change, or your account is in debit (or building high credit). Under the new approach, suppliers are expected to set payments that better match your expected annual cost and explain how the figure was reached. To keep costs down, check your tariff and compare alternatives at https://www.energyplus.co.uk/.

How can I pay less under the new direct debit rules?

To pay less overall, focus on your unit rates and standing charge (the biggest drivers of cost), then make sure your monthly direct debit reflects realistic usage. Steps that often help: (1) submit regular meter readings or use a smart meter to avoid estimated billing, (2) review your tariff before any renewal, (3) reduce unnecessary credit build-up, and (4) switch to a better-value plan if available. You can explore options at https://www.energyplus.co.uk/.

Can I challenge my supplier if my direct debit is set too high?

Yes. Ask your supplier to show how your direct debit was calculated (usage assumptions, tariff rates, and any debt/credit on the account). If you have up-to-date meter readings and your balance doesn’t justify the amount, request a recalculation or a payment plan review. If you’re not satisfied, follow the supplier’s complaints process. You can also reduce costs by checking whether a different tariff would be cheaper at https://www.energyplus.co.uk/.

Do I have to pay by direct debit, or can I choose another method?

You usually have options such as variable direct debit (paying what you owe each month), paying on receipt of bill, or prepayment (where available). However, direct debit tariffs can sometimes be cheaper. To decide what’s best for you, compare the total annual cost across payment methods and tariffs. Check your options at https://www.energyplus.co.uk/.

What’s the difference between fixed direct debit and variable direct debit?

Fixed direct debit is a set monthly amount intended to spread costs across the year, which can create credit in summer and reduce winter bill shocks. Variable direct debit typically collects the exact amount billed each month based on actual usage, so payments rise in winter and fall in summer. If you want more predictability, fixed may suit; if you want to pay closer to real-time usage, variable may suit. Either way, your tariff matters most—compare rates at https://www.energyplus.co.uk/.

How often should my direct debit be reviewed?

Many suppliers review direct debits periodically (often every 3–6 months) and after key events such as meter readings, tariff changes, or balance shifts. With Ofgem’s 2026 changes, reviews and explanations should be clearer and more consistent. To avoid surprises, submit readings regularly and check your account balance and forecasted annual cost. If you want to reduce your annual bill, review tariff options at https://www.energyplus.co.uk/.

What should I do if I have a large credit balance on my energy account?

If you have built up significant credit, ask your supplier to explain why and whether your monthly direct debit can be reduced. You can also request a refund of credit (suppliers may have eligibility checks, such as ensuring future bills are covered). Keeping your payments aligned to usage can improve cashflow. For wider savings, compare tariffs at https://www.energyplus.co.uk/.

Ofgem direct debit changes 2026: how to pay less

A practical UK guide to what the 2026 direct debit reforms are likely to mean, how to check your payments, and the safest ways to reduce bills without risking debt.

Understand what may change in 2026 (and what won’t)
Spot when your monthly amount looks too high (or too low)
Compare tariffs and payment types, with examples and a checklist

Get your energy quote See what’s changing in 2026

Guidance for UK homes (not business energy). Figures are illustrative and tariff rules vary by supplier and meter type.

Fast answer: the best ways to pay less (without relying on the rule change)

Ofgem’s direction of travel is to make direct debits fairer and easier to understand (for example, improving how suppliers set and explain monthly amounts). That’s helpful, but the biggest reductions usually come from using less energy, choosing the right tariff, and keeping your monthly direct debit aligned with your real usage.

1) Check your direct debit logic

Ask: is your payment based on an up-to-date reading, your tariff rates, and a sensible credit/debit balance plan?

2) Compare tariffs (whole of market)

If you’re on a poor-value deal, changing the tariff can reduce the unit rate and standing charge—which reduces your monthly payment too.

3) Avoid “too low” payments

Cutting your direct debit too far can create debt that’s recovered later. Aim for a payment that covers annual usage (and corrects any debt gradually).

Important: Energy prices and supplier policies can change, and details of 2026 reforms may evolve. Use this guide to make safe decisions now, and re-check when final rules and supplier processes are confirmed.

What Ofgem direct debit changes in 2026 could mean (plain English)

Ofgem has been pushing suppliers to improve how they set, review and explain direct debit amounts—especially where customers build up large credit balances or are moved onto higher payments without clear reasons. While the exact implementation can vary by supplier, the practical intent is usually:

More transparency

Clearer explanation of how your monthly amount is calculated
Better visibility of the readings/estimates used
More understandable timing of reviews and adjustments

Fairer outcomes

Reduced chance of paying far more than needed (large credits)
Earlier detection when payments are too low (reducing sudden debt recovery)
Improved handling of vulnerable customers in payment difficulty

What won’t change: the cheapest way to pay is still typically to reduce your underlying annual cost (unit rates/standing charges and consumption). Direct debit reforms are about how you pay, not automatically lowering energy prices.

Why some direct debits feel “too high” in the UK

Most suppliers smooth your bills across the year—higher winter usage, lower summer usage—so your direct debit stays relatively steady. But it can be set too high if your supplier uses older estimates, hasn’t captured a recent usage reduction (for example, new boiler insulation measures), or is trying to build/maintain a credit buffer.

What to look for in your online account

Your account balance: A small credit heading into winter can be normal. A consistently large credit year-round may mean your payments are higher than needed (check supplier rules for refunds).
Estimated vs actual readings: If many bills are estimated and you have a traditional meter, submitting readings can quickly correct your payment.
Tariff name + end date: If your fixed deal has ended (or ends soon), your unit rates may change. A direct debit change might simply reflect new rates.

How to pay less: the safe step-by-step plan

If you want a lower monthly payment, aim to reduce your annual cost and keep your direct debit aligned with real usage. This keeps things stable while Ofgem’s 2026 changes roll out.

Get your latest usage data (kWh), not just pounds.

Smart meter homes: use your supplier app/online account for last 12 months’ kWh. Traditional meters: take fresh readings and check how often estimates were used.
Check your tariff details: unit rates, standing charges, and whether there are exit fees (common on fixed deals).
Work out what a “reasonable” monthly payment looks like. As a guide, annual cost ÷ 12, then add/subtract a manageable amount to clear any debt or reduce an excessive credit balance over time.
Compare the market for your postcode, meter and payment type. Small differences in unit rates can meaningfully shift annual cost.
If your current supplier’s payment seems wrong, ask for the calculation. Request the readings/estimates used and the assumed annual consumption figure.
Only reduce the direct debit once you’ve corrected the inputs. Otherwise you risk building a debt that gets recovered later.

Compare energy deals for a lower monthly payment

Tell us a few details and we’ll show whole-of-market options for your home. You’ll be able to compare estimated monthly costs by tariff and payment method (direct debit, pay on receipt, prepay where available).

Tip: If you’re on a fixed tariff, check whether you have an exit fee before switching. Some suppliers waive exit fees if you’re within a set window of the end date.

What you’ll need

Postcode (to match network region and available tariffs)
Whether you pay by direct debit or another method
If you know it: your annual usage (kWh) or monthly spend

Get your quote

First name

Surname

Postcode

Used to match prices in your electricity/gas region.

Phone (optional)

If you’d like help comparing tariffs by payment type.

How do you prefer to pay?

We’ll use your details to provide quotes and support. Terms vary by supplier.

Direct debit vs other ways to pay: what usually costs less?

Payment method can affect which tariffs you can access and how you spread costs across the year. Here’s a practical comparison for UK households.

Payment type	Typically cheapest access?	Best for	Watch-outs
Monthly direct debit	Often yes (more tariffs priced for DD)	Budgeting across the year; avoiding seasonal spikes	Can create large credit if set too high; must track readings
Pay on receipt (cash/cheque/online)	Sometimes fewer discounted options	People who want bills that match usage periods	Winter bills can be high; missed payments can escalate quickly
Prepayment (top-up)	Varies; can be competitive but depends on tariff availability	Tight weekly budgeting; avoiding bill shocks	Risk of self-disconnection; friendly credit rules vary; switching can be limited by debt/meter type

Decision checklist: who should focus on what?

This guide’s approach suits you if…

You can provide readings (or have a working smart meter)
You want fewer surprises and prefer a steady monthly amount
You’re willing to review your tariff at least once a year
You want to avoid building up debt while lowering payments

Be extra cautious (or get help) if…

You’re already in arrears or on a repayment plan
Your bills are mostly estimated and you can’t access the meter
You have an Economy 7 / multi-rate setup and aren’t sure about your night usage
You have a prepay meter with existing debt (switching can be restricted)

Renters: you can usually switch supplier if you pay the energy bills, but check your tenancy agreement for any clauses about meter changes or access. You don’t need your landlord’s permission to switch supplier in most cases.

Two realistic scenarios (with numbers)

These examples show how a monthly direct debit can be high (credit build-up) or low (debt build-up). Numbers are illustrative and will vary by region, tariff rates, and standing charges.

Scenario A: Paying too much and building credit

Home: 2-bed flat, gas + electricity, smart meter
Estimated annual cost: £1,620 (illustrative)
“Neutral” monthly: £1,620 ÷ 12 = £135
Current direct debit: £175

If this household pays £40 extra per month, they could build around £240 credit over 6 months (assuming usage matches the annual estimate and no price changes). If the supplier’s calculation is based on outdated usage, a reading review plus a tariff comparison could reduce both the annual cost and the monthly payment.

Safer action: Ask the supplier what annual consumption figure they used. If your balance is strongly in credit, request a refund (supplier policies vary) and propose a revised monthly figure based on current usage.

Scenario B: Cutting payments too far and creating debt

Home: 3-bed semi, higher winter use, traditional meter
Estimated annual cost: £2,160 (illustrative)
“Neutral” monthly: £2,160 ÷ 12 = £180
Direct debit reduced to: £140

This creates an average shortfall of £40 per month. Over 6 months, that could become ~£240 debt (before any price changes). Suppliers often respond by increasing the direct debit later to recover the shortfall—sometimes sharply.

Safer action: Correct readings first, then reduce the payment gradually (for example, targeting a small winter buffer). If you’re already in debt, agree an affordable repayment plan.

In both scenarios, the most durable way to pay less is to reduce the annual cost (tariff + usage) and keep the direct debit aligned to that reality.

Costs, exclusions and common pitfalls (UK-specific)

Before you change payment amounts or switch, check these common issues that can affect UK households.

Exit fees on fixed deals

Switching away from a fixed tariff can trigger an exit fee per fuel. Check your online account and tariff documents before switching.

Estimated bills

A direct debit based on estimated readings can be off for months. Submitting accurate readings (or fixing smart meter data issues) is often the fastest correction.

Economy 7 / multi-rate traps

If most of your use is daytime, an Economy 7-style setup can cost more. Compare with a single-rate tariff where possible.

Standing charges vary by region

Two homes with the same usage can have different costs due to regional standing charges and network costs. Always compare using your postcode.

Switching with debt

If you owe your supplier, switching can be restricted (especially with prepay). Ask what options you have and whether debt can be repaid after switching.

Chasing “the lowest” monthly payment

A low direct debit isn’t the same as low costs. If payments don’t cover usage, you can get a large catch-up increase later.

If you’re struggling to pay: contact your supplier early. You may be eligible for a payment plan, emergency credit (prepay), or support via the Priority Services Register depending on your situation.

FAQs

Will Ofgem’s 2026 direct debit changes automatically lower my bill?

Not automatically. These reforms are aimed at fairer and clearer direct debit setting. Your bill depends on your tariff rates, standing charges and energy use. The best way to reduce the bill is to lower annual cost and ensure the direct debit matches that cost.

Why did my supplier put my direct debit up when I’m in credit?

It can happen if your supplier forecasts higher future usage (for example, winter), your tariff rates have risen, or their model is using estimated readings that overstate your consumption. Ask for the calculation and the annual consumption figure they’re using.

Can I insist on paying exactly what I use each month?

Some suppliers offer variable direct debit (where the amount changes with actual usage), but many default to a fixed monthly amount to smooth seasonal costs. If you want tighter matching, ask your supplier what options are available for your meter type and tariff.

Is monthly direct debit always the cheapest payment method?

Often, but not always. Some tariffs are priced to encourage direct debit. However, the cheapest option for you depends on what’s available in your region, your meter type (single rate vs Economy 7), and your credit history (for some products).

What if I have a smart meter that isn’t sending readings?

Your supplier may fall back on estimates, which can distort direct debit amounts. Report the issue, keep manual readings if you can, and ask the supplier to review your direct debit based on your latest actual usage.

Can I switch supplier if I’m renting?

In most cases, yes—if you’re responsible for paying the bills. You normally don’t need your landlord’s permission to switch supplier, but you should keep the landlord informed and follow any reasonable access requirements for meter readings.

Could switching affect my direct debit amount straight away?

Yes. A new supplier may set a direct debit based on your estimated annual usage and their tariff rates, and may include a buffer for winter. If the amount looks wrong, provide readings and ask for a recalculation.

What’s the safest way to reduce my monthly payments?

First correct your usage inputs (readings/smart meter data), then compare tariffs and switch if it reduces your annual cost. Only then lower the direct debit to a level that covers annual usage and addresses any debt gradually.

Trust, methodology and sources

Page accountability

Written by: EnergyPlus Editorial Team
Reviewed by: Energy Specialist
Last updated: February 2026

How we assess “how to pay less”

We prioritise actions that are:

Within your control (readings, tariff choice, usage habits)
Low regret (reduces risk of debt or missed payments)
UK-specific (regional charges, meter types, switching rules)

Assumptions & limitations

Scenario numbers are illustrative, rounded, and exclude one-off adjustments
Tariff availability varies by postcode, supplier, credit checks and meter type
Direct debit rules and supplier processes can change; always confirm with your provider

Sources (UK)

Ofgem (UK energy regulator) – guidance on consumer protections, billing and payment practices
Citizens Advice: energy – help on bills, switching and complaints
GOV.UK – official UK government information (support schemes and consumer rights references)

Editorial note: Where 2026 reforms are discussed, we focus on the practical implications for households (transparency, fairness, and avoiding large credit/debt swings) rather than making promises about specific supplier behaviours.

Ready to reduce your monthly payment the right way?

Compare whole-of-market tariffs for your postcode and see which options could lower your estimated annual cost (and your direct debit) without relying on guesswork.

Get your energy quote Re-read the key takeaways

Back to Guides & FAQs

Updated on 26 Feb 2026