Cash point: How to cut your household bills
Want to start saving money on bills but find the jargon too confusing? We asked an expert to explain the confusing terms so you can slash your costs
Do you have a sneaking suspicion you could be paying less for your bills, but the thought of tackling them makes you wince? You’re not alone. Thousands of us pay more than we should, but we’re put off, thanks to complex terminology and the fear that switching providers is a faff. Here, MoneySavingExpert’s Guy Anker helps simplify things...
KEEP AN EYE ON GAS
Gas bills can be misleading, because if you’ve overpaid or underpaid in the past (say, if you’ve been away and used less), suppliers might lower or raise your bill to compensate, meaning it doesn’t always reflect how much gas you’ve actually used. “Look at your bill to work out how much gas you really use, then go to a comparison site and enter that usage [gas is measured in kWh, which stands for kilowatt hours]. You’ll be amazed how much you can save,” says Guy.
SWAP WITH EASE
Switching isn’t complicated. “You just give your meter reading to the new supplier and nothing changes – it’s the same service, just a different company on the bill,” says Guy. Even if you don’t want to switch suppliers, read your bill carefully – each supplier must show if they have a cheaper tariff available to you, so it’s worth double-checking. Ofgem rules mean that UK energy suppliers can’t charge customers an exit fee if the contract is within its final 49 days, which is usually the best time to switch.
CHANGE SUPPLIER AFTER 18 MONTHS
Worried you’ll get a massive electricity bill, having worked from home for months? “If you haven’t switched suppliers in the last year to 18 months, you’re probably paying more than you should,” says Guy. “Over 50 per cent of people are on their supplier’s standard tariff, which costs, on average, £300 to £350 more annually than the average household’s bill.” To check, look at your bill – your Tariff Comparison Rate (like APR on credit cards) is what you need to compare with other providers. It’s displayed on your energy bill or annual statement, and online. It shows your tariff comparison rate, the amount you pay per kWh, and your standing charges. It’ll give a fairly good idea of the cost of each tariff, but using a comparison site approved by Ofgem is the best way to find the cheapest deal.
CHECK YOUR ELECTRICITY READING
Energy is also measured in kWh. You should be able to see if recent readings were given by yourself (“C” for customer), one of their staff (“A” for actual), or an estimate (“E”) – if it’s marked as “E”, and you receive an unusually high reading, send them your own for comparison. To make it even easier, scan the QR code on your bill using the Uswitch app and they’ll do it for you.
WORK OUT HOW MUCH MOBILE PHONE DATA YOU REALLY NEED
Ever felt bamboozled by the data offers when you upgrade your phone and have a sneaking suspicion you’re paying far too much? Most of us do end up overpaying on data costs, but you can work out exactly how much you need. “Most deals offer huge data allowances, but might not be realistic for your usage,” says Guy. “A poll by MoneySavingExpert showed the average person uses less than 3GB [gigabytes] each month, but firms regularly offer 10-20GB as standard.” Go through your last three bills to work out your average data use, then choose slightly more. “If your average is 2.5GB, choose 4GB to avoid going over and being charged.”
STOP PAYING FOR A HANDSET YOU OWN
When we take out phone contracts with sparkly new phones, we’re at risk of paying for the phone twice. “If your contract offers you a new iPhone for £40 each month, half of that is paying off the phone and the other half is the airtime [texts, minutes etc],” reveals Guy. “If the contract ends after 24 months, you’ve technically paid off the phone, but some companies keep you on that tariff. You wouldn’t
pay for a TV twice, so don’t do it with a phone!” Make a note of when your contract ends and shop around. “In most cases, it’s usually cheaper to buy the phone outright with a SIM-only deal, if you can afford to,” Guy adds.
DON’T OVERPAY FOR FAST BROADBAND
We’re often sold the idea of superspeedy broadband, but it can come with a hefty pricetag – so is it worth it? To know what we need, we should focus on the MB speed. According to Guy, “Ten to 15MB is standard. If you’re just using email and browsing the web, it’s more than enough. Fibre offers higher speeds from 35MB to 80MB, and Virgin has advanced technology and offers even faster.” Roughly gauge how much to spend based on the data usage shown on your bill – gamers, for example, need topend broadband. Bear in mind that the more people in your home – and immediate area – using the service, the more strain (and potential lag) there could be. “It’s worth asking providers what your ‘local’ speed is, as you could end up paying for something you don’t receive,” warns Guy. And watch out for freebies. “Some companies offer free subscriptions to things like Spotify or BT
Sport when joining, but once that ends, you could be automatically subscribed to the full-price version.”
ASK YOUR CURRENT PROVIDER TO MATCH
Be sure to haggle. “You’re likely to get the best deal by switching, but if you do get offered something better than your current provider offers, call and tell them – they might match it and save you the hassle of doing anything,” says Guy. This can work for anything from insurance to broadband, but won’t be the case for energy providers who aren’t able to match other providers.
NEVER AUTO-RENEW YOUR INSURANCE
With any type of insurance – from contents to breakdown cover – never blindly autorenew. Guy explains, “You inevitably get charged more for sticking with the same insurer, so always search for alternatives before your renewal date – ten minutes of research could save hundreds.” Think about your job title when searching for car insurance, too. “Use the ‘job-picker’ function on MoneySavingExpert.com,” says Guy. “For example, ‘PA’ and ‘secretary’ might both describe your job but give different premium costs.”