What is a Direct Debit?

A Direct Debit lets your bank or building society know that businesses and services can take money from your account on a set date.

People use Direct Debits to pay monthly bills and make one-off payments. They’re a simple way to manage regular payments, such as:

  • Utility bills
  • Gym memberships
  • Mobile phone contracts
  • Monthly subscriptions

A Direct Debit is different to a standing order. With a standing order, you set up the payment for the exact amount. With a Direct Debit, the payment is set up by an organisation and the exact amount you pay can go down or up.

In this article

  • What is a Direct Debit?
  • How to set up a Direct Debit
  • How to cancel a Direct Debit
  • Pros and cons of Direct Debits

How do Direct Debits work?

When you set up a Direct Debit, the money you owe is automatically taken from your bank account on the agreed date.

You’ll choose the date your Direct Debit will come out when you it set up.

How to set up a Direct Debit

You don’t need to tell your bank when you set up a Direct Debit. To set up your Direct Debit, you’ll need to provide the recipient with your account information.

You can usually provide these details over the phone, online or through the post. They will need to know:

  • Your name and address
  • Your account number and sort code
  • The name and address of your bank

The recipient will usually provide you with a Direct Debit instruction form to complete. If you set up the Direct Debit over the phone or online then you will be sent written confirmation of the Direct Debit instruction.

How to cancel a Direct Debit

You can stop your Direct Debit at any time with our mobile banking app, using Internet Banking or by speaking to someone in branch.

How to cancel a Direct Debit using our mobile app

Using our mobile app to stop your Direct Debits is quick and easy.

  1. Head to the accounts page of the mobile app.
  2. Click the three dots (…) next to the account your Direct Debit is linked to.
  3. Select ‘Direct Debits’ from the drop-down menu.
  4. Scroll through your Direct Debits and hit the ‘Cancel’ button underneath the relevant one.

How to cancel a Direct Debit using Internet Banking

  1. If you don’t have our mobile banking app, it’s just as simple to stop your Direct Debits online.
  2. Open ‘Direct Debits and standing orders’.
  3. Choose ‘Manage your Direct Debits’ from the list of options.
  4. Scroll through your list of Direct Debits and click cancel next to the relevant one.

 

Once you have cancelled a Direct Debit, you need to let the recipient know. Otherwise, they may think there’s been a mistake and set up the payment again.

If you don’t see an option to cancel your Direct Debit or receive an error message, contact the company directly and ask them to cancel it.

If you notice any unfamiliar Direct Debits taking money from your account, contact your bank as soon as possible.

How to change your Direct Debits

You won’t need to change the amount you pay each month, as this is arranged by the recipient of your Direct Debit.

Sometimes you may need to let them know about changes to your account. These can include:

  • If you legally change your name
  • When you open a new account without using a switching service.

It’s important to update your Direct Debit details if the above happens so everything goes through as normal.

If you set up a new bank account using a switching service, your Direct Debits are moved over to your new account automatically.

Pros and cons of Direct Debits

Before you set up a Direct Debit, it’s important to understand the pros and cons.

Pros

  • Quick and easy - Direct Debits automatically take payments from your account. This can save you time and means you don’t have to manually pay your bills each month.
  • Save money - Many utility companies offer a Direct Debit discount. This gives customers a small percentage off their payments when using a Direct Debit.
  • Secure - Direct Debit payments are protected by The Direct Debit Guarantee. This is offered by all banks and means you’ll have any incorrect payments refunded back to you.

Cons

  • Charges - If you don't have enough money to cover your Direct Debits, you could be charged by your bank or go into your overdraft. Before this happens, you have until 2:30 pm to pay the money into your account to avoid charges - this is called the ‘retry process’.
  • Lack of control - Because companies will withdraw your Direct Debit payments automatically on the agreed date, whether the money is in your account or not, you could run the risk of becoming overdrawn.
  • Easy to forget - The term ‘out of sight, out of mind’ can often apply to Direct Debits, so you’re more likely to accept whatever is withdrawn from your account without questioning whether you’ve been over-charged.

The content on this page is for reference and does not constitute financial advice. For impartial financial advice, we recommend government bodies like the Money Advice Service.

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