Page last updated at 14:11 GMT, Wednesday, 23 September 2009 15:11 UK

New E.On customers to pay monthly

Eon
E.On is one of the "big six" energy suppliers in the UK

New customers of E.On who pay by cash or cheque will be sent a bill every month rather than quarterly, the company has announced.

E.On said that the new system would make it easier for customers to budget, although one price comparison site said it could be seen as helping cash flow.

There were no plans to change arrangements for existing customers, a company spokesman said.

Many students will be signing up to new contracts as the academic year starts.

Many of these might choose a cheque payment option as it allows housemates to share the cost of energy bills, rather than one individual putting their details on a direct debit deal.

About 40% of existing E.On customers pay by cash or cheque.

Payments

When asked whether this was a tactic to encourage greater take-up of direct debit, the E.On spokesman said that although this automatic form of payment was cheaper for the company, the move was designed to help customers manage their bills.

Receiving a bill every month will hopefully encourage customers to become more aware of their consumption
Gareth Kloet, Confused.com

He added that no terms and conditions had been changed, so the amount of time allowed to pay a bill would not change.

"The announcement is a brave move by E.On as it could be interpreted as simply a manoeuvre designed to improve cash flow," said Gareth Kloet, of comparison website Confused.com.

"However, it should be embraced by customers as a way to gain greater control and visibility of their energy bills.

"Receiving a bill every month will hopefully encourage customers to become more aware of their consumption and therefore how much they spend, which are the key tools for budgeting.

"Frequent billing should also encourage customers to read their meters so that they can start paying for what they use, instead of always paying an estimated bill."



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