How to cancel a Direct Debit in the UK (and end the contract too)

This guide covers Direct Debits in the UK. If you live in the United States, a payment a company takes from your bank account is an automatic payment, and the rules are federal: the CFPB says "You have the right to stop a company from taking automatic payments from your account, even if you previously allowed them." Our guide to stopping automatic payments, listed under related guides below, covers the US steps.

In the UK, a Direct Debit is an instruction you give your bank or building society so that a company can collect money from your account. The scheme is owned and managed by Pay.UK, the operator and standards body for the UK's interbank retail payment systems. You can stop one yourself, and you do not need the company's permission to do it.

The Direct Debit Guarantee says: "You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation." You can get in touch with your bank, or cancel online or in your banking app. Telling the company matters because a silent cancellation can leave the account in arrears instead of closed. If you are ending a broadband or phone deal, the guides for Sky and TalkTalk show where each company wants notice sent, and the telecom cancellation guides cover the rest.

For a gym, the company is the club: the notice goes to the club, and PureGym's cancellation guide shows where to send it.

Pay.UK advises: "Make sure you cancel at least a full day before a Direct Debit is due to be collected. Otherwise, it's possible that the payment might already be what's called "in flight" and can't be stopped. The best thing to do if you aren't sure is check how much notice your bank or building society needs."

In plain terms, the legal cut-off is the end of the business day before collection. After that, you need both your bank and the company to agree. If you are a David Lloyd member, for example, see David Lloyd's cancellation guide before the next collection date, and Octopus Energy's guide if your Direct Debit pays an energy bill. Gym cancellation guides list the notice each club expects.

Cancel well before the collection date, not on it. A payment already in flight cannot be stopped, and you would have to ask the company to refund it.

Pay.UK is clear that cancelling the Direct Debit "simply stops payments from going to the organisation you are paying". It also says: "If you still owe money for something you've bought, or are still receiving a service, you'll need to organise another way of paying."

The Guarantee does not change your contract either. In its words: "What the Guarantee doesn't do is affect the contract you have with a biller." Its example is a mobile phone: you can claim back a wrong amount, "but you will still owe the biller for the calls you've made and the data you've used, or for the amount you agreed to pay."

A minimum term, a notice period and any amount already owed all keep running after you cancel the Direct Debit. Missed payments are still owed.

Pay.UK suggests telling the company you stopped the Direct Debit: "If you still need to pay them (maybe you're just changing the way you pay, not stopping the service), they'll be able to tell you about alternative payment methods. If you're ending the relationship, you'll be able to make that clear." A dated letter is the clearest way to make it clear.

1. 1

   Find your notice period

   Look in your terms for the minimum term, the notice period and how notice must be given. Our cancellation deadline calculator works out the last day for you.

2. 2

   Send a dated letter

   Include your name, account number, the end date you are asking for and a request for written confirmation. A cancellation letter template gives you the wording.

3. 3

   Keep proof of sending

   Use a method that records the date, such as Royal Mail Signed For. The guide to recorded delivery, Signed For and Special Delivery explains the options.

4. 4

   Cancel the Direct Debit last

   Stop it after the final payment you owe, so no payment is missed during the notice period.

Postbye writes the letter and mails it to the company's UK postal address by Royal Mail, with a Signed For option that adds a signature on delivery. You then hold a dated written notice, which the bank-side cancellation does not give you. Our how it works page shows the steps.

Pay.UK says: "Money should not be collected from your account after you have cancelled the Direct Debit but check your bank account, just in case. If you do see a payment, contact your bank immediately and claim a refund under the Direct Debit Guarantee."

1. 1

   Contact your bank straight away

   Pay.UK says it is the bank that is responsible for refunding you in the event of a mistake, even if the original error was made by the organisation collecting the payment.

2. 2

   Say the Direct Debit was cancelled

   Give the date you cancelled it and ask for a refund under the Direct Debit Guarantee.

3. 3

   Keep the company's letters

   Your written notice and its reply show the agreement had ended or was ending.

The Guarantee covers errors. It is not a way to avoid money you genuinely owe, and a refund you were not entitled to must be paid back.

If the company takes money from your debit or credit card instead, the rules differ. Citizens Advice says: "The law says you can withdraw your consent and stop a future payment under a continuous payment authority at any time up to the end of business on the day before the payment is due." You tell your card issuer, and it says: "Your card issuer has no right to insist that you ask the company taking the payment first. They have to stop the payments if you ask them to."

The same warning applies: stopping payments that relate to another agreement, such as a gym membership or a magazine subscription, means you still need another way to pay what you agreed. Citizens Advice describes the England position.