Three in 10 (29%) UK consumers have missed bill payments or have gone into their overdraft in the past year, despite having funds in other accounts, Moneyhub has found.

Research by the company’s payments division also revealed that 8.3% of consumers missed payments each month. Moneyhub suggested this is potentially damaging to their long-term financial wellbeing and limits choices when it comes to credit.

The most commonly missed payments by those who regularly miss bills are utility bills (41%), council tax (29%) and credit card repayments (28%), equating to 2.7 million, two million and 1.8 million households respectively.

Of those who missed payments but had money in other accounts, 42% said that having automatic payments that would move money if one account didn’t have enough would help them to avoid missing a payment or going into their overdraft.

A further 38% said that receiving a notification of a payment due to be collected would be similarly helpful.

Moneyhub said that with open banking payments, the provider can much better support the consumer by preventing situations where the consumer is “blindsided by an unexpected price increase or payment”, while “making it very easy” for the customer to pay or transfer funds.

The research also demonstrated a disconnect between the 35% of consumers who are paid other than monthly and the rigid structure of direct debits requiring the consumer to manage their budgets for monthly payments when they themselves are paid weekly or fortnightly.

Head of payments at Moneyhub, Mark Munson, said: "Direct debits will be 60 years old in 2024, however today customers demand greater flexibility for bill payments that match their circumstances. New smart payment plans facilitated by Moneyhub’s open banking payments division will allow businesses to offer customers a far greater choice of payment schedules - helping customers to stay on track and reduce bill anxiety.

"In the future, it is our hope that more companies will take a flexible approach to payments. When people are paid weekly or bi-weekly, it can be hard to then budget for a big one-off payment at the end of the month for their bills. Using new technology like variable recurring payments businesses can help their customers pay on time and budget more effectively, reducing the strains and stresses they currently face."

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