Martin Lewis challenges everyone to check their bank statements for ‘hidden’ payments
Martin lewis is the consumer champion millions turn to when they need answers or money advice.
The founder of MoneySavingExpert.com has focused on coronavirus-related topics since the lockdown began, and the website has produced an excellent, informative list of help guides to consult.
But in Monday’s edition of This Morning, the financial guru used its segment to encourage viewers to take five minutes out of their day and check their direct debits – as it could save them hundreds of dollars a year.
Martin issued the “Five minute direct debit challenge” and urged everyone to take a closer look at their monthly bank account expenses.
He explained the different types of payments you might see on your bank statement, including direct debits, standing orders and recurring payments.
He told This Morning viewers: “Many already know my money mantras for shopping – ‘Do I need it? Can I afford it?’ or “Am I going to use it? Is it worth it? Answer “no” and you shouldn’t buy, but we need to apply this logic to all regular payments as well. “
While direct debits and standing orders can be familiar terms to most people, Martin explained that recurring payments are often “hidden”.
He explained how direct debits are typically used to establish payments for energy and utilities.
“You give a business your bank details and permission to debit your account if necessary, and they decide what to take and when, yet you have the right to ask the bank to shut them down – but first make sure you are. out of contract, “he said.
These differ from a standing order, something that is generally used to make regular payments to people, often used by private tenants to pay their landlord.
Martin explained how standing orders work: “Here you set up an automated instruction to pay a company or person a fixed amount, and you set the frequency,” he said.
He also added how customers immediately cancel these types of payments through their bank.
Another form of exit from your bank is a recurring payment, something Martin described as often “hidden”.
Recurring payments are set up using the long card number on your debit card and are often used for monthly online subscription payments or payday loans.
“These were previously known as continuous payment authorities – where you give a debit or credit card number and the business can accept payment when it sees fit,” he said. .
“Yet they look like one-off transactions, so they’re harder to spot and often dismissed by consumers as something they just don’t remember signing up for.
“It’s usually easier to cancel them through the companies themselves, but sometimes they play hard – since 2009 you have the right to cancel with the bank, although some staff mistakenly say you can’t . “
So how easily can people know what they are paying?
“Standing orders and direct debits are easy to locate,” Martin said.
“If you do online banking, there is usually a page that lists them, so it’s easy to check (it’s best to do it this way so that it also includes currently suspended subscriptions). you can ask for it.
“Recurring payments mainly consist of going through statements to verify.
“Although there are apps like Smartbill and Yolt that can do this for you through the open banking tool. If you find businesses you haven’t heard of, try Google or your bank.”
For those who take on that five-minute direct debit money-saving challenge, Martin suggests dividing the expenses into different categories.
1. The obvious gap
“This is where you pay for something unnecessary,” he said.
“I’ve heard of people paying insurance for refrigerators they threw away years ago, old cellphones they don’t use and many more,” he said. to viewers.
2. Things you don’t need, but want, ask yourself if it’s worth it?
“There are some things you want but don’t need, so the question is, is the payoff you are getting worth it?
“Think about the annual cost, £ 8 per month equals £ 100 per year – so if this is a TV subscription that you only use a few times, is it worth it? Otherwise, cancel or try to find something cheaper. “
Martin went on to point out that a viewer had previously been in touch via Twitter to say that she had managed to save £ 300 a year by canceling a gym membership which she had only used twice in a year.
Meanwhile, another person was paying £ 9 per month – which equates to £ 108 per year – for a magazine subscription they often forgot.
“Just check that you are not in breach of contract by canceling,” he advised.
3. The things you really need – can you do it cheaper and get the same?
“Check if it’s a good price online or through comparison sites and consider haggling.
“If it’s not good value for money, use it as a spur to change, whether it’s energy bills, broadband, water bills or more, look what you can do to save. “
You can watch Martin Lewis’ segment on direct debits and the phone call live on This Morning via the STV reader here.
For more consumer advice, see the MoneySavingExpert.com website here.