Cost of running a home falls
The cost of running a home has fallen by nearly 14% in the past two years and now stands at around £8,059 per year, according to estimates based on analysis of industry data by Sainsbury's Home Insurance. This equates to £155 per week or £22.08 a day per household. In 2008, the annual cost was nearly £1,300 more at £9,324 per year.
The main reason behind the reduction in costs of running a home is the significant fall in the cost of mortgage payments, which account for 43% of all household expenditure. Borrowers are shelling out approximately 28% less on their mortgage payments than they were in October 2008.
This fall in payments has been accompanied by a decrease in gas and electricity bills, which have fallen by an estimated 9% and 6% respectively compared with prices two years ago in October. However, according to the British Retail Consortium, an increase in energy bills could be on the horizon.
A number of household costs have risen, however, with council tax, which is the next biggest expenditure after mortgage payments, accounting for 17% of total costs, increasing by nearly 5% in the past 24 months. Water and sewerage costs meanwhile have increased by just under 3%.
In January 2009, in the midst of the recession, Sainsbury's Home Insurance conducted research that suggested that a significant number of people were looking to reduce costs by cutting back on their insurance cover. The findings estimated close on a million (946,000) people had either cancelled their home contents insurance or reduced the amount of cover they had. Furthermore, nearly 700,000 people reduced or cancelled their buildings insurance policy as a direct consequence of their financial situation.
Ben Tyte, Head of Sainsbury's Home Insurance, comments: "Hopefully the reduction in the cost of running a home means that fewer people now feel the need to cut back on something as essential as home insurance. We spend thousands of pounds each year running our homes and have often invested even more money furnishing them. Yet, so many people have been putting this investment at risk by cutting back on their home insurance.
"Good quality home insurance doesn't have to be expensive. Although we have officially emerged from the recession, cost-cutting continues to have an impact on the majority of households. However, there are some great deals to be had by shopping around and not just when it comes to home insurance; you'll be surprised at how much you could save simply by getting a few quotes for your gas, electricity and even mortgage."
Sainsbury's Home Insurance is currently offering all new customers with a Nectar card £40 in vouchers and double Nectar points on Sainsbury's shopping and fuel for 2 years when buying combined buildings and contents insurance. All new customers can currently benefit from a 15% discount when combined buildings and contents insurance is purchased together, and a further 5% discount if purchased online. Customers can also apply over the phone.
It is competitively priced and offers an extensive range of cover and benefits. These include:
Unlimited buildings cover for the cost of rebuilding your home
Unlike some home insurers, Sainsbury's Finance does not apply interest charges for customers paying their premiums by direct debit
Maximum no-claims discount of up to 30% as standard, with the maximum discount being available if you have been claim free for five or more years
Where more than one discount applies, discounts will be applied consecutively to the reduced premium. Minimum premium applies
Optional no-claims discount protection (additional premium required)
Standard cover for accidental damage to TV, video, audio and computer equipment - extended cover can be purchased for an additional premium e.g. for pets.