Standing Order vs Direct Debit: the Differences Explained

1 October, 2025 · 7 min read

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If you live in the UK, you almost certainly already use Standing Orders or Direct Debits - maybe without giving them much thought. They’re the items stacking up in your bank statements; they quietly take care of your rent, bills, and subscriptions, helping you stay on top of life without having to make a new payment every month.

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The terms are often used interchangeably, but (surprise!) Standing Orders and Direct Debits aren’t the same thing. Knowing the difference can save you from payment mistakes, help you choose the right method for each situation - and gives you something to talk about over dinner. (“Pass the mayonnaise… hey, want to know the difference between a Direct Debit and a Standing Order?”)

In this blogpost, we’ll walk you through how each works, their pros and cons, and when to use one over the other - particularly if you’re a small business owner.

Standing Orders

A standing order is an instruction you give to your bank or business account to send a fixed amount of money to another account at regular intervals - like weekly, monthly, or quarterly.

Think of it as you telling your bank or business account: “Please pay this person £500 on the 1st of every month.” Your bank then does it automatically until you tell it otherwise.

How to set up a Standing Order

You, the payer, set up a standing order. It can usually be done through online banking (or mobile app), over the phone, or by filling out a form in the branch of your bank. You’ll need the payee’s bank details (their name, sort code, and account number) and the exact amount to pay.

What payments are best suited for standing orders?

Standing orders are perfect for fixed, predictable payments, such as rent, mortgage payments, moving money to a separate savings account, or paying fixed-fee subscriptions or club memberships.

Because the amount never changes, standing orders are a “set it and forget it” way to manage consistent outgoing payments.

Managing and cancelling standing orders

The good news about standing orders is that you’re always in control. in control. You can amend, suspend, or cancel a standing order at any time directly with your bank. The recipient has no power to change it.

Pros and cons of standing orders

✅ Pros	❌ Cons
Easy to set up and manage	Doesn’t work for bills that change every time (like gas or electricity)
Great for fixed amounts	Payments can bounce if you don’t have enough money
You stay in control of changes and cancellations	No refund guarantee if something goes wrong

Direct Debits

A Direct Debit is an instruction you give to a company, authorising them to collect money directly from your account. The big difference? The company sets the payment date and amount (though they must give you advance notice).

Think of it as you saying: “Yes, Electricity Company, you can take what I owe you each month.”

👉 For a full breakdown, see our direct debits guide.

How to set up a Direct Debit

The business sets this up on your behalf. All you have to do is provide your account details and authorise the payment through an online checkout, or a phone call.

Use cases for Direct Debits

Direct Debits are best for payments that vary in amount or need flexibility, like utility bills, mobile phone contracts, loan or credit card repayments, streaming services and gym memberships.

Managing and Cancelling Direct Debits

You can view, amend, or cancel Direct Debits through your bank. But the payment amount and schedule are controlled by the business, not you.

The silver lining? All UK direct debits come with the Direct Debit Guarantee, which promises an immediate refund if a payment is taken in error.

Pros and Cons of Direct Debits

✅ Pros	❌ Cons
Perfect for variable bills	Less control (the company sets the amount/date)
Automatic - no risk of missing payments	Can make budgeting tricky if amounts vary a lot
Protected by the Direct Debit Guarantee	You need to trust the organisation collecting payments

Standing Order vs Direct Debit: Key Differences

So, what’s the real difference between a standing order and a Direct Debit? Let’s break it down.

	Standing order	Direct Debit
Who controls the payment?	You control setup, the amount, and cancellation.	The company controls the amount/date (with your authorisation).
Amounts and frequency	Fixed amounts, fixed schedule.	Variable or fixed amounts, flexible schedule.
Set up and admin	Set up by you, through your bank or business account	Set up by the company but authorised by you.
Flexibility	Easy to manage but inflexible for bills that vary from month to month	Great for variable bills but requires you to keep an eye on things!
Customer protection	No refund guarantee if something goes wrong.	Covered by the Direct Debit Guarantee.

Benefits and drawbacks: Standing Order or Direct Debit?

Both payment methods have their place. Let’s take a look at when to use each.

When to use Standing Orders

Paying your landlord a fixed rent, regularly transferring savings into a separate account, or sending regular support payments (e.g. to family)

When to use Direct Debits

Covering variable bills (things like utilities, phone, council tax), subscriptions that might change over time, and repaying loans or credit cards.

Direct Debits and standing orders for businesses

Now, let’s turn the tables. Imagine you’re not the customer, you’re the business taking the payments - your choice of payment method can affect customer relationships and cash flow.

Standing orders: Better for small businesses or clubs with predictable fees (e.g., gym, music lessons). Plus it’s usually free for both payer and recipient. Hooray!

Direct debits: Ideal for scaling businesses that need to collect variable payments automatically, but you may need to use a bureau or bank service provider, which involves setup and transaction costs.

Alternatives to standing orders and Direct Debits

There are alternatives in the UK, such as Recurring card payments, which are linked to debit/credit cards - things like your Netflix subscriptions are usually recurring card payments. There are also Continuous Payment Authorities (CPA), which are often used by online services or payday lenders

It’s worth remembering that these alternatives can be more flexible, but they don’t always come with the same protections as Direct Debits.

Summary Table: Direct Debit vs Standing Order

Feature	Standing Order	Direct Debit
Who sets it up?	You	The company
Who controls changes?	You	The company
Payment type	Fixed amount	Fixed or variable
Best for	Rent, savings	Bills, subscriptions
Protection	None	Direct Debit Guarantee

Does ANNA provide standing orders and Direct Debits?

Yes, if you have an ANNA business account it’s easy to set up standing orders and Direct Debits, so you can keep business running smoothly!

Conclusion

Standing orders and Direct Debits are both handy tools for managing your money. If you need fixed, predictable payments under your control, a standing order is your friend. If you want hands-off convenience for variable bills with added protection, Direct Debit is your best bet.

Whichever you use, take a moment to review your current payments. Making sure you’ve got the right setup can help you avoid stress, missed payments, and even save you money in the long run.