Home phone users pay extra for paper bills and paying by card

In a year of pay freezes and spending cuts, home phone customers have been spared no mercy with inflation-busting rises to line rental, call charges and connection fees.

But, according to uSwitch.com, consumers could shave millions off their phone bills simply by changing the way they receive and pay for them.

Customers could save a staggering £184 million a year simply by changing the way they handle their phone bills, reveals uSwitch.com, the independent online price comparison and switching service. A study of the top five home phone companies reveals that paying bills by direct debit could save consumers £69 million a year and receiving a bill by email instead of by post could save £115 million. With home phone charges hiking up to 39% this year, card payments and paper bills are fast becoming a luxury that many may no longer be able to afford.

The uSwitch.com survey of almost 8,000 phone customers reveals that 87% pay their bills by direct debit, 6% by credit or debit card and 4% by cash or cheque. But, while card or cash payments might be the preferred option, they come at a price. BT charges an additional £1.50 a month for non direct debit payments, TalkTalk charges £3.50 a month and Virgin Media adds a hefty £5 a month onto bills. In total, more than 2.5 million phone customers are paying their phone bill by means other than direct debit, shelling out premiums of £69 million for the privilege.

The survey also shows that 1 in 3 customers (34%) still get their phone bills on paper, costing those with BT and Virgin Media an additional £1.25 a month and those with TalkTalk an additional £1.45 a month. In total, paper bills are costing phone customers an extra £115 million a year.

Of the five major home phone companies, the Post Office is the only one not to charge its customers a premium for card payments and paper bills. As a result, 42% of its customers pay by means other than direct debit and 71% opt to receive their bills in the post.

The figures come as two of the UK's largest home phone companies prepare to raise prices for the second time this year. From 1st October, BT line rental is being increased to £12.04 a month, call set-up fees will jump to 10.9p and daytime call rates will rise to 6.4p per minute. TalkTalk is also raising prices - line rental will climb to £12.04 a month, call set-up fees will rise to 10.9p and daytime call rates will jump to 6.4p per minute - a staggering 39% increase since the start of the year.

Ernest Doku, communications expert at uSwitch.com, comments: "The savings consumers could make by changing the way they receive and pay their bills could go some way towards wiping out the astronomical increases we're seeing to call charges this year. The £184 million comes on top of line rental fees and the cost of calls. For many this is simply money down the drain.

"Paper bills are fast becoming a luxury that many consumers can no longer afford. There are clear environmental as well as financial benefits to receiving bills electronically, but it's important that customers continue to check their bill rigorously every month when it comes through on the email.

"Customers should think too about whether they really need to settle their bills by cash or card. If they do, they could save serious money off the bottom line by moving to a different phone company. Primus, for example, offers line rental for £8.99 a month. There's no extra charge for card payments, although paper billing costs an extra £1.76 a month."