Check pros and cons of bill-smoothing deals

HOUSEHOLD bills have gone up for many Australians during the coronavirus pandemic, and bill smoothing can be an effective way to manage your budget.

However, consumers should be wary of paying more for the privilege.

Bill smoothing allows smaller sums of money to be paid to a billing provider more frequently, rather than paying one large bill a few times a year.

Canstar spokeswoman Effie Zahos said she generally supported bill smoothing but warned there were some things to look out for.

“In some cases, if you choose to pay by the month then you can end up paying a premium for that – companies may round up the amount you pay each time and, in the long run, you end up paying more,” she said.

“Sometimes you can also get a 10 or 20 per cent discount from paying bills upfront, so you’re better off paying it all at once.”

Where bill smoothing resulted in higher overall costs, Ms Zahos recommended consumers set up their own informal arrangement by determining how much they paid for bills each year and splitting that amount into equal weekly, fortnightly or monthly amounts to be set aside until the bill arrived. Origin retail executive general manager Jon Briskin said bill smoothing helped ease the pain of high energy bills during summer and winter.

Almost 251,000 householders – about 6.6 per cent of Origin electricity and natural gas customers – have entered billsmoothing arrangements, which are reviewed every three months to ensure their payment is in line with their energy usage. If their usage is less than their payments, customers receive a credit to their account. “Changing seasons means changing energy habits and fluctuating bills, which can make it difficult for households to budget,” Mr Briskin said.

“Bill smoothing is a great solution because it evens out payments across the year, which means customers can pay a set amount and help keep their household budget in check.”