Leading payment specialist allpay Limited has revealed the results of its annual consumer survey, providing insight into payment behaviours across UK household bills. To facilitate the research, allpay continued its relationship with external company TLF Research, who conducted the survey via its online Panel Database. Findings outlined that for consecutive years, there is reduced consumer confidence in paying household bills, with the ongoing decline in Direct Debit uptake and a continuing need for cash across the Social Renters market. With previous research conducted in 2020, allpay’s results enables the insight into pre and post pandemic payment behaviours.
Luke Jones, Senior Market Intelligence and Strategy Analyst, allpay explains: “Earlier this year, we surveyed 1,000 people from all areas of the UK, with varying household status. The results found that fewer social renters were fully confident in managing money and paying their household bills. Jones continued to explore how the number of social renters without a bank account had continued its trend over the last 2 years, declining from 2% to 0.8%.
“In trend with other years, cash continues to be relied on by a significant number of payees, representing an average of 11% for each bill payment”, continues Jones. “With many businesses moving towards a cashless society, the stubborn rate at which the method remains showcases its value to many in the social renter’s space”.
This years’ results demonstrated that 12.8% of social rent payments were made utilising cash, with 50% of these made at business offices; often cited as a cost-intensive source for organisations. Despite a marginal decline in its use for rent payments, cash remained strong across a 5-year period (2017-2022), with an increase of 2.5%.
The most popular payment type across all household bills remains Direct Debit, with an average take-up of 39.5% across all bills, though usage decreased by 6.5% across the pandemic. Rent payments registered the lowest share against all other bills (35%), with the most popular across Internet & Phone (55.7%) and Insurance (46.2%) bills.
allpay Household Bills Survey 2022 – Social Renters Market
Debit Card payments remain the second most popular payment method, albeit a small decline (5%) on average per bill compared to 2020. Online Debit Card payments is the favoured channel for payments by the social renter’s demographic. Take-up is highest in both Vehicle Tax and Council Tax payments, with the use of Credit Cards the largest increase of all payment methods from 2020 to 2022 (2.9%). The decline in Direct Debits and Debit Card payments has been offset by Standing Order and Bank Transfer payments, which increased collectively by 8% in the last 2 years for rent payments.
Monthly payments continue to be the most popular frequency in all household bills, although payees have increased their preference in weekly and fortnightly payments. Quarterly instalments across the whole household bill set remained favourable, with an average of more than 9%; showcasing the need for flexibility in payment dates to suit each individual, even more so during the pandemic”.
When asked about how paying household bills could be made easier, 41.5% of respondents outlined how payment reminders (via text or email) would be a significant aid, followed by Instalment Plans, Budgeting Tools and Self-Service Automated Payments.
The pandemic effected the payment behaviours of all consumers across the UK, and a quarter of social renters stated the pandemic changed the way they make regular payments. Consumers cited making less in-person payments and new technology as the main causes.
A quarter of respondents also indicated they were anticipating changing the way they make their payments over the next 12 months, with a shift to Online Debit Card Payments and Direct Debits expected.
When asked, 20% of consumers sought “being able to afford” and the “increased cost of living” as their major concerns regarding the payment of upcoming bills. Further, just 37% of respondents outlined that paying their rent was their top payment priority.
Jones concludes: “Our findings point to the ongoing unexpected decline in Direct Debit usage, despite the uptake in bank accounts for social renters. Cash remains a key focal method with a steady rise in Bank Transfer, Credit Card and Standing Order payments throughout the pandemic. To ensure those who feel less confident in paying their bills, flexibility on methods and frequencies is essential to ensure all payees can make their payments with ease and on time. Enhanced and tailored support to consumers following cost of living increase is a crucial feature which organisations need to focus on in their service delivery over the coming months”.