Regular and automatic payments are usually the best ways to pay your bills or subscriptions. We explain what Direct Debits, standing orders and recurring card payments are, when to use them and how to cancel.
Direct Debits
Direct Debits tell your bank you’re happy for a company to take money from your bank account on an agreed date. It’s usually used to pay bills automatically, so the amount can either:
- stay the same each time, such as Council Tax or car insurance payments
- change depending on how much you owe, such as a credit card or gas bill.
The company will tell you how much they’ll take in advance, usually with ten working days’ notice. If the payment date falls on a weekend or bank holiday, the money is normally taken the next working day.
If there’s a mistake – such as taking the wrong amount – you can ask your bank for a refund under the Direct Debit Guarantee.
Paying companies by Direct Debit means you don’t have to remember to pay a bill, which avoids fines and other penalties for paying late. You might even get a discount on your gas or electricity bill.
How to set up a Direct Debit
The company you’d like to pay will usually have a form to fill in, often online or over the phone. You’ll be asked for:
- your bank account number and sort code
- the date you’d like them to take the money.
Your bank will then set the payment up.
How to cancel a Direct Debit
You can cancel a Direct Debit at any time by contacting your bank or via mobile and online banking – often in a section called regular payments.
Provided you do this at least a day before the Direct Debit is due, your bank must refund the payment if it’s taken.
This stops the payment but doesn’t cancel any contract you might have. It’s best to contact the company first to check if you owe any money. If so, you might need to pay another way.
Standing orders
This lets you move a set amount of money to another account on a set date. This can either be to:
- another person
- a company
- to your other accounts.
You can choose an end date, a certain number of payments or to leave it running. You can also change the payment amount whenever you like.
It’s often used for making rent payments or regularly moving money to a savings account.
How to set up a standing order
You can usually do it yourself using online or mobile banking – often in a section called regular payments – or you can contact your bank.
You’ll need the destination sort code and account number. If you’re paying someone else, check if you need to add a statement reference so they can find your payment.
How to cancel a standing order
You can ask your bank to cancel or change any of the details at any time. You can usually do this via online or mobile banking, in branch or over the phone.
If you owe money to a company, it’s best to contact them first. Cancelling a standing order doesn’t cancel any contract, so you might need to set up another method of paying.
Recurring card payments
This lets companies take money from your debit or credit card. It’s also known as a Continuous Payment Authority (CPA) or future card payment.
It’s often used for subscriptions and insurance policies, such as:
- streaming services (like Amazon Prime, Disney+ and Netflix)
- gym memberships
- magazines
- car insurance
- car breakdown cover.
How to set up a recurring card payment
A company will ask for your long debit or credit card number rather than your sort code and account number. You often don’t have a choice of payment options.
If you later cancel your card as lost, damaged or stolen, you might have to provide your new card details.
How to cancel a recurring card payment
Cancelling the service or subscription will also stop the payment. You can usually do this via your online account with the company.
If you’re still within a contract, such as a 12-month gym membership, you might need to pay a penalty to leave early or arrange a different way to pay for the remainder. If you forget to cancel a contract and it automatically renews, check for a cooling off period. If there is one, you can ask for a full refund.
If you have trouble contacting the company, you can ask your bank to cancel it for you. Provided you do this by 5pm on the weekday before the payment is due, your bank must refund the payment if it’s taken.
If you’re looking to stop a payment to repay a short-term loan, speak to your lender to tell them you’re struggling. See Help if you’re struggling to pay your bills for more information.
If you don’t have enough money in your account
Most banks will contact you if a payment has failed, giving you a deadline to put enough money in – often by 2pm that same day.
If they still can’t make the payment, you might have to pay an unpaid transaction fee or overdraft interest if they make it anyway. Our compare bank accounts tool lists the fees for many accounts.
If the payment isn’t made, always contact the company you owe as you might face penalties for paying late. You can explain what’s happened and ask for another way to pay.
Have you missed a payment?
Use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live.
Regularly review payments
As these payments are automatic, it can be easy to forget about them. Always check what you’re paying for and cancel any services you no longer need.
You can usually view your regular payments:
- on bank statements
- using online or mobile banking
- by contacting your bank.
Look for sections called ‘regular payments’, ‘subscriptions’ and ‘scheduled payments’.
