Households who don’t pay energy bills by direct debit face £254 stealth hit

Households have been hit with another ‘sinister’ charge on their energy bills – only weeks after The Mail on Sunday exposed a separate stealth tax worth billions. 

The latest hidden penalty costs an estimated five million households who do not pay by direct debit up to £254 a year on top of their regular bill. 

They are ‘standard credit’ customers who pay by cash, cheque or over the phone – and faced an extra charge for paying this way, capped at £84 a year until 2021. 

But that has risen to a maximum of £254 a year. Regulator Ofgem blamed an algorithm that calculates the figure and the huge rise in energy prices. 

Adam Scorer, of the charity National Energy Action, said: ‘How can it be that an elderly couple who always pay their bills on time must shoulder an extra £20 a month just because they want to pay in cash?’ 

The charge disproportionately affects pensioners. 

Research for energy supplier Octopus found that almost a third of people who pay by cash or cheque are aged over 65. 

And 75 per cent of those who pay by traditional methods think they are charged the same or less than someone on direct debit. 

Octopus said it had refused to pass on the full surcharge to its customers, keeping the fee at £80. It added: ‘Suppliers do incur extra costs for other payment methods, but this surcharge has got out of hand and we’re asking Ofgem to review it urgently.’ 

Two weeks ago, the MoS revealed that the cost of bailing out failed energy supply firms was being quietly shunted on to bills through the ‘standing charge’. This has risen 50 per cent in the past year, costing billpayers around £273 each.

> How to save money on energy- and how your bills are calculated