Shared services
Bill management services can be a boon to people living in shared houses, but it’s important to check the small print
Household bills in shared houses can cause problems, whether the household is made up of two or ten people, students or people in work. The time it can take to set up and manage accounts with service providers, calculate and collect contributions from those living in the house, and then pay the bills, all adds up.
Bill management services are companies that market themselves to people in shared houses and offer to consolidate household bills — energy, water, phone, broadband and council tax — into one monthly payment per person.
How a bill management service works
A group of people living together agree to use a bill management service. They sign up and decide which household bills they want to be managed.
The bill management company may charge a fee for its services — a one-off charge, a regular charge, or both. Other fees might also be charged, for example for late payments, administration charges for individual services or if no one is at the property when an appointment is made for a service provider to visit. The total charge payable per group is made up of the combined cost of each individual service divided by the number of people in the group, plus any fees charged by the bill management company.
Some bill management companies act as an agent for the group. This means they take out contracts with service providers on the group’s behalf; for example, switching gas and electricity supply to their service or arranging broadband installation. Other bill management companies simply provide a platform that allows consumers to manage their household bills, receive contributions towards bills and send payments to settle those bills.
Service providers are responsible for providing the individual services. They may pay bill management companies a commission for introducing a group to their company.
In a market where consumers are free to choose their gas and electricity providers from more than 150 gas suppliers and over 170 electricity suppliers,¹ bill management companies usually only offer gas and electricity from one supplier. They may also use sole telephone and broadband service providers, or they may select those providers from a narrower pool than the whole market. The supply and pricing of water and sewerage services are determined by location, not customer choice.
What to think about before signing up with a bill management service
Price: You will usually be charged a premium compared to the prices you would pay if you signed up directly with the service provider. Check you are happy with what you are being charged for each service you sign up for. Are the prices fixed or variable? Are they inclusive of VAT? Take a two-step approach: first, work out the total amount you will pay the bill management company for each individual service; and second, use a price comparison service to compare deals you can get yourself against what the bill management company is offering.
Fees: Carefully check what you will be charged. Make sure you include any fee(s) when you compare the total price you will pay with price comparison services.
Deposit: Check if you will be asked to pay a deposit, how much it will be, whether it will be charged per person or per property, when you will have to pay and when you will get it back.
Minimum term: Check if there is a minimum period for the agreement and what will happen if you need to end it early.
Paying: Check how you can pay, when payments will be taken and whether you will pay in advance or in arrears. If your regular payment fails because you do not have enough money in your account, will there be a charge? This will be on top of any charge you will have to pay to your bank. Also check what will happen if someone in your group has a problem paying, as you may be liable for their share.
Service providers: Check to see whether you or the bill management company decide who provides each individual service. If the terms and conditions allow the bill management company to change service provider, think about how that could affect the price you pay.
Data sharing: Using a bill management company means there is a ‘middleman’ between you and each service provider — check how your data will be shared and who with.
Preferred supplier: Check your tenancy agreement to see whether you have to tell the landlord if you change energy supplier, and whether you will need to change back before you move out.
Taking time to think carefully before signing up could save money over the period you live in the shared house. You might decide that the convenience of a bill management service outweighs the higher cost you are likely to pay. If your price comparison research shows that you would pay a significant amount more to benefit from the convenience of having your bills managed, talk to the others in your house about whether this is a price for convenience that you are all content to pay, and ensure that you all understand what you are agreeing to.
Kate Hobson is a consumer expert in the Expert Advice Team at Citizens Advice and is consumer subject editor on the Adviser Editorial Board
Endnote
- According to Ofgem figures for domestic gas and electricity suppliers, updated 3/11/17 for gas and 6/11/17 for electricity
