Direct debits vs standing orders

Lesson 4 of 14 in our free Banking & Payments guide: a 5-minute money game with the key points below.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Banking & Payments is free for everyone.

Questions you'll answer

A company takes the wrong amount by direct debit. What does the Direct Debit Guarantee give you?

£50 to your own savings every payday → Standing order. Fixed amount, you're in control. Perfect for a standing order.
Energy bill that changes with usage → Direct debit. Varies each month, so the supplier collects it.
Paying a flatmate back £20 a week → Standing order. Person-to-person, fixed amount.
Phone contract → Direct debit. Companies usually set these up as direct debits.
Council tax instalments → Direct debit. Councils commonly collect by direct debit.
Fact: “You can cancel a direct debit yourself through your bank.” — Yes — but you still owe the bill. Cancelling the payment doesn't cancel the contract.
Fact: “A company must warn you before changing your direct debit amount.” — Under the Direct Debit scheme rules they must give advance notice of changes.
Myth: “Standing orders change automatically when your rent goes up.” — Standing orders stay fixed until YOU change them. Update it or you'll underpay.