Avoid financial jetlag this Christmas

It’s good to talk to long distance loved ones at Christmas – but not so good being presented with a painful bill in the New Year.

uSwitch.com warns that the 10.4 million households still with BT could be paying up to 92% too much to keep in touch with friends and family abroad, and provides four easy tips to save money on calls this Christmas.

1. International Calling Plans

Check to see if your current phone company offers an international calling package that can be added to your existing deal. For example, BT Option 1 customers can pay an additional £1 per month and save over £8 on a 2 hour call to Australia. Other phone companies offer free or ‘inclusive’ calls to a wide range of countries for a higher monthly fee, but if you call abroad regularly this will quickly pay for itself. For example, if you are a TalkTalk customer on the Talk 1 tariff, consider upgrading to the new Talk 2 International tariff, which provides unlimited evening and weekend calls to the UK and 28 countries for a fixed fee of £5.99 a month. You would only need to be on the phone to the USA for 2 hours to cover this cost.

2. Switch Home Phone Company

If you don’t make enough international calls to warrant a special calling plan, there is still a huge variation across standard phone tariffs for calls abroad. uSwitch.com warns that BT remains up to 70% more expensive for calls to France or the USA, and 60% more expensive for calls to Australia. Always check that the deal you are on provides the best value for the types of calls that you make. BT Option 1 customers could save £8.29 on a 2 hour call to the USA by switching to First Telecom, Saver 1 package.

3. Pre-Fix/Pre Pay Options

If you don’t want to switch provider, you would like more control over the amount you spend on overseas calls, or you simply don’t call abroad very often, a good option is to purchase pre-pay credit. This provides you with a special code to enter before making an international call. The call rates are much cheaper than using a basic landline call plan and the time you can spend on the phone is limited in the same way as a calling card. Alpha Telecom customers can save £8.40 on a 2 hour call to the USA by using this option. Alternatively, if you don’t want your calls to be limited, some providers allow you to dial a special national rate number before the international number.

4. Calls over the Internet

Voice Over Internet Protocol (VoIP) is a technology that enables phone calls to be made over the internet, often at a significantly reduced rate. On average, VoIP is 82% cheaper than BT Option 1 for calls to France or the USA and 79% cheaper for calls to Australia. With 1.5 million new broadband connections this year, VoIP is becoming an increasingly popular way of calling long distance. However, new users need to be aware that often savings can only be made when the person on the other end of the phone is also on VoIP. The quality of calls is sometimes affected by internet traffic levels, and, crucially, not all services enable calls to be made to the emergency services.

There are three different ways to use VoIP, depending on the provider you are with. Skype customers make calls directly from their PC, using a special headset and software that needs to be downloaded. Vonage customers connect a special box to their broadband modem, then connect their standard phone to that box and make calls in the conventional way. Tesco VoIP customers also need to download software onto their PC and are given a special phone to plug in. They would then save nearly £10 on a two hour call to Australia… so if every Aussie in the UK signed up to this service, they could save a staggering £10 million!

Steve Weller, Head of Communications Services at uSwitch.com, comments: “It’s clear that VoIP is a great way to save money on calling abroad. However, the sophisticated range of international calling plans and other landline options show that there’s no reason to write off the traditional home phone just yet. Christmas is an expensive time of year and few pounds here and there can really mount up – so if you have family or friends abroad that you wish to call this Christmas, plan ahead and make sure you don’t miss out on savings by not shopping around.”