On Monday, I was really pleased to attend the launch of the Consumer Vision for Payments, kindly hosted by Travers Smith, which Fair By Design has helped to develop.
Most of us do not spend much time thinking about how we pay for things. What matters is the outcome, whether that is buying a coffee, purchasing a train ticket or renewing our car insurance, rather than the payment process itself.
And payments work well for us a lot of the time. According to UK Finance, consumers made £41.6 billion individual payments in 2026 – the vast majority of which go without a hitch, despite rising fraud. But there are still areas where payments could be better… As the National Payments Vision enters its implementation phase, now is the time to make sure that payment innovation delivers confidence, control and connection for all.
People on low incomes are not a homogeneous group, but at Fair By Design we believe that more flexible payment options could give many people greater control over tight and often unpredictable budgets. This could be particularly valuable when paying large but essential household bills such as energy.
The poverty premium update we commissioned from the Personal Finance Research Centre at the University of Bristol showed that those who pay by direct debit still get the best energy deals. This is even the case for those on prepayment meters, despite the work done by Government and Ofgem to get rid of the prepayment meter premium under the Energy Price Cap, as the cheapest fixed rate energy deals are only open to those on direct debit.
Direct debit is a good fit for people who receive their income monthly and who are confident that they will have enough money in their account when the direct debit falls due. But according to Nest Insight 25m people have incomes that vary by more than £500 a month. Our research has found that people on low and/or volatile incomes often choose to pay their energy bills by standard credit because it gives them the flexibility and control they need. They welcome the fact that they have a few days to gather the funds together after the bill arrives, that they know they are only paying for what they have used, and that they don’t have to fight to get any built up credit balance back from their energy supplier. However, under the Energy Price Cap they pay an extra £138 per year for paying this way – a classic example of the poverty premium.
The good news is that relatively new payment methods like variable recurring payments could help. This payment method could allow consumers to break up a large bill like energy into smaller and more manageable chunks – weekly installments for example. They would also allow a consumer to cancel a payment right up until the moment it goes out of their account rather than having to give several days’ notice.
For Fair By Design, the key principle is simple: people on low incomes should be able to access the payment methods that work best for them without paying more for doing so.
There are other groups who could also benefit from improvements to the payments system. Supporting a relative with managing money and making payments remains unnecessarily complex. Disabled people are often required to provide the same information repeatedly to access support. Cross-border payments can be costly and unpredictable. And continued access to cash and face-to-face banking services remains essential for those who rely on them.
The Consumer Vision for Payments is a shared set of priorities developed by a coalition of consumer advocates and civil society organisations representing particular groups. However, we all share a mission to ensure the National Payment Vision delivers better outcomes for everyone.
You can access the Consumer Vision for Payments here. And if you would like to know more please do get in touch.
By Maria Booker, Head of Policy, Fair By Design
