Be your own Chancellor to reduce £33 billion monthly UK bill burden
Rising living costs have led to a £33 billion national price tag to run the UK’s homes. Ahead of this month’s budget, MoneySuperMarket urges bill payers to take control of their finances and fight back against spiralling essential spending.
According to MoneySuperMarket’s Bill Barometer households are forking out £33 billion collectively a month on essential bills – a £1,360 burden per household each month. A quarter of those polled are paying more than £500 a month on mortgage or rent payments, with five per cent of those polled spending in excess of £1,000, just to keep a roof above their heads. Respondents admit that financially this is the hardest bill to cover, followed by council tax, gas, electricity, and then the food shopping.
Clare Francis, editor in chief at MoneySuperMarket, said: “Forget the Chancellor’s Budget statement – hard pressed bill payers need to take control of their finances and look at ways to reduce the cost of running their household. It’s when times are tight that people need to be aware of how much they are paying each month for essential bills, and not bury their heads in the sand. Working out monthly outgoings and budgeting is crucial – as is seeking out the best deal on all essential household bills so you’re not paying over the odds.
“We have found that households are precariously juggling their bill payments, choosing which to pay and which to ignore – and a fifth of people admit that bills increasing by just £50 (or less) each month would cause them to struggle financially. In fact, one in five people admit they’ve missed an essential bill payment in the last year, and another 12 per cent predict they’ll miss another bill – or pay it late – in the next four weeks. It’s a balancing act that can’t continue long-term without significant implications. UK households need to take action and review all of their financial products to make sure they are benefiting from the most competitive deals on the market. Apathy is rarely rewarded and switching from average deals to the market leader on a range of financial products could save households £3,621 over twelve months2.”
How to save over £3,600 a year
Mortgages – Saving £2,092
Someone with a £150,000 mortgage on the market average standard variable rate (SVR) of 4.41 per cent could save themselves £2,092.50 a year switching to a two year fixed rate mortgage from Yorkshire Building Society (£975 fee) at 1.66 per cent.
Savings – interest earned £103
Five years into a historical low base rate means savers are still suffering. The current average rate for easy access accounts is just 0.47 per cent, but by switching to the market leading Britannia Select Assess Saver offering 1.95 per cent, savers will see £103 in extra interest generated on a pot of £10,000.
Credit cards – Saving £256
Those unable to pay off their credit card debt quickly and looking to spread the repayment costs over a period of time should ensure they move their outstanding debt to a zero per cent balance transfer card, to save hundreds of pounds in interest. Moving a credit card balance of £2,000 from the current average rate of 18.17 per cent APR to the market leading 31 month Barclaycard Platinum card would save £256.60 (taking into account the balance transfer fee). MoneySupermarket has a SmartSearch credit profiling tool which matches applicants against the products they are most likely to be accepted for without leaving a mark on their credit file.
Personal loans – Saving £113
A personal loan allows consumers to make fixed repayments over a set period of time, ideal for anyone looking to budget. Many new loans are only available to existing current account customers but, consumers should take the time to shop around to make sure they are getting a good deal for their circumstances. If someone had a loan for £5,000 over five years with an average rate of 9.98 per cent APR, swapped to the market leading AA Personal Loan at 5.7 per cent APR, an annual saving of £113.97 could be made.
Current accounts – Earn £150 in interest
There is also substantial interest to be made for current account holders. For example, someone holding £1,500 in an account with an average high street rate of 0.51 per cent could gain an extra £150.25 by switching to the Halifax Reward current account which pays a £5 bonus each month, plus £100 cash back.
Car insurance – Saving £236
Shopping around for cover is essential, especially at the point of renewal to ensure you’re getting the best value policy for your money. Additionally, paying annually for cover instead of monthly could cut the cost of your premium, and for car insurance, by adding a partner, or if you are a younger driver, adding an older driver to your policy could also help cut the cost. There are some great savings to be made if people ensure their insurance is the most competitive available. On average, consumers who use MoneySuperMarket to switch their provider can save £236 on car insurance.
“Home Bill Checker” savings for home, broadband and energy – Saving £650
MoneySuperMarket’s new Home Bill Checker uses postcode data to analyse average neighbourhood bills, to help people identify where they can save money. Simply enter your postcode and the tool identifies the typical prices people are paying in your area for their home insurance, energy and broadband3. You can refine the quote by specifying how many rooms you have, the value of your contents and your age. The average saving is £650.
Travel insurance – Save £18
Shopping around for travel insurance and opting for a best priced premium policy could save you money. For example, a couple going to Spain for a two week break could save £18.37 by using Cheaper Travel Insurance, compared to the average cost. Taking out an annual multi-trip travel policy could be more cost-effective if you intend to travel more than once in a year.