The budget plan balancing act

Options that take the stress out of paying household bills can come at a price. Niall Brady investigates what is good value and reveals some of the pitfalls.

HOUSEHOLDS have many options for spreading the cost of regular expenses evenly throughout the year without having to rely on expensive unregulated bill payment companies.

Up to 2,300 people have lost €6m after giving the money to Home Payments, a Dublin company that managed their bills by spreading the cost into regular installments. The service was expensive, costing €60 to set up, with ongoing fees of €5.75 to €6.65 a week. Home Payments ceased trading on August 4, blaming the collapse on unsuccessful property investments.

The scandal has exposed how people have difficulties juggling regular bills, even when they earn enough to pay them. Eugene McDarby of Money Village, a debit management company said: "Home Payments was in business for more than 40 years, which shows that many people believe they need somebody else to take control of their bills. They like to smooth out the cost so that they know how much money is left at the end of every week."

Successful budgeting requires households to prepare an income and expenditure statement, listing incomings and outgoings. "People overlook the small items - doctors' visits, birthday presents, gifts for your children's school friends, last minute additions to children's book lists," says McDarby.

We examine the budgeting plans that allow you to keep on top of your bills - and tell you how much they cost.

Energy Bills

Bord Gais has a Plan-Pay option for gas and a Level-Pay facility for electricity. The aim is to smooth energy costs into roughly equal instalments throughout the year - useful for those who struggle with big gas and electricity bills in winter.

To qualify, you must be a homeowner and pay  by direct debit each month, even though bills will continue to arrive every two months. Installments are based on energy usage in the previous year, but Bord Gais can adjust the monthly payment if your consumption starts to change. Over and underpayments on your gas account at July 31 each year are taken into account when setting monthly installments for the coming year.

ESB said it will offer similar budget plans for gas and electricity "in the near future". Some existing customers have equalizer plans that allow them to pay for electricity in equal installments, although the facility is not currently open to other customers.

Airtricity has budget plans for existing electricity customers, but not new ones. It does not allow gas customers to spread their bills throughout the year.

Airtricity and ESB are cheaper than Bord Gais, especially their dual-fuel discounts for households that buy gas and electricity bundles.

Simon Moynihan of Bonkers.ie, a price comparison website said: "Budget plans would be more helpful for gas than for electricity because gas consumption spikes in winter and households are left with large difficult bills at times when household finances are traditionally at their tightest."

The above is an excerpt from a longer article that included advice on bank bill paying services, insurance and mortgages.


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