How to Cancel a Direct Debit, and What the Guarantee Covers

Cancelling a direct debit is simple: you contact your bank or building society, and in many banking apps you can do it in a few taps. The part people get wrong is what happens next. Stopping the payment does not end the contract behind it, so a cancelled direct debit for a bill you still owe can lead to missed payments and charges.

This guide covers how to cancel safely, and the protection every direct debit carries under the Direct Debit Guarantee.

How to cancel a direct debit

The Direct Debit Guarantee says: “You can cancel a Direct Debit at any time by simply contacting your bank or building society.” It adds that written confirmation may be required, and asks you to notify the organisation you pay as well.

In practice:

1. Find it in your banking app. Banking apps usually list direct debits with your other regular payments. NatWest’s help pages, for example, cover how to set up, view or cancel a direct debit.
2. Cancel it, either in the app or by contacting your bank.
3. Tell the company you pay. Do this before or at the same time, not after.
4. Check your next statement to make sure no further payment is taken.

Before you cancel: end the contract or arrange another payment

Cancelling the direct debit stops the money leaving your account. It does not:

• end a broadband, phone, gym or insurance contract
• clear a bill you still owe
• cancel a subscription inside the company’s own system

So decide first what you are trying to do.

You want to end the service. Contact the company and cancel the contract or subscription in the way your terms set out. Once the final bill is settled, cancel the direct debit.

You want to pay a different way. Set up the new payment method with the company before cancelling the direct debit, so no payment is missed.

You can’t afford the bill. Talk to the company before cancelling. Some bills, like rent, council tax and energy, are priority debts that Citizens Advice says can cause serious problems if you ignore them. Our guide to which bills to pay first explains the order and where to get free help.

What the Direct Debit Guarantee covers

Every direct debit in the UK comes with the Direct Debit Guarantee. It gives you three protections.

1. Notice of changes

If the amount, date or frequency of your direct debit changes, the Guarantee says “the organisation will notify you (normally 10 working days) in advance of your account being debited.” That notice is your chance to update your budget, or to challenge a change you did not agree to.

2. A refund for mistakes

If an error is made in the payment, the Guarantee says “you are entitled to a full and immediate refund of the amount paid from your bank or building society.” If something looks wrong, such as an amount you did not expect, contact your bank.

The refund comes from your bank, so you do not have to wait for the company to agree first.

3. The right to cancel

As above, you can cancel at any time through your bank or building society.

Direct debits and standing orders: the difference

A direct debit is pulled from your account by the company you pay, which is why the amount can change and why the Guarantee exists. A standing order is a fixed payment you set up yourself, and you change or cancel it yourself in your banking app. Our guide to seeing every direct debit and changing the date covers both.

A yearly clear-out

Old direct debits and subscriptions are easy to forget. Once a year, go through the full list in your banking app and ask of each one:

• Do I still use this?
• Is the amount what I expect?
• Is there a cheaper deal now?

Our annual bill review walks through the bills worth checking.

Keep your list up to date

Whenever you cancel or add a direct debit, update your bill list the same day. A bill tracker like Billo keeps every bill with its amount and due date, and reminds you 3 days before each one, so a cancelled payment never leaves a gap you forget about.

Summary

• Cancel through your bank or building society, at any time; written confirmation may be required.
• Tell the company too, and end the contract or arrange another payment first.
• The Guarantee gives notice of changes (normally 10 working days) and a full, immediate refund for errors.
• Review your direct debits once a year.