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You can save a lot on your biggest regular monthly outgoings by remembering to review them every so often and switching when you are out of a contract or term period (or if an early exit fee is smaller than the potential saving). Here are 7 tips on how to save on some of your most significant bills
By Rebecca O'Connor
1. Cut your energy bill
Energy prices are coming down – a prime opportunity to see if you can save around £20 a month by switching to a lower cost supplier. Comparison sites can help you find the best deals, for example Finder, calculates that someone on an average Big Six tariff of £1,086 could save £237 a year by switching to the current cheapest 12-month fixed rate available from Green Network Energy, which charges an average £853 a year. It’s worth checking what the cheapest deal is using an energy comparison site such as uSwitch two or three times a year. Don’t forget you can also reduce energy costs by turning the thermostat down. Just 1 degree lower could save you 10 per cent.
2. Cut your mobile bill
Save up to £300 on mobile phone bills a year by switching provider. Finder calculated that two people on an average 2GB 30-day SIM-only monthly contract from one of the top three providers – EE, Vodafone or O2, could save £299 by switching to the best 2GB monthly sim-only deal (iD Mobile, £7.50 a month). This comparison assumes the handsets are already owned. If a new contract includes a handset, Finder suggests additional savings could be made by buying the handset outright or by using a 0 per cent credit card deal to make the purchase and repay this over time - see our guide on how to use credit cards wisely.
3. Cut your food bills
Buying less meat, sticking to offers, buying in bulk, using wholesale clearance websites such as approvedfood.co.uk and using a shopping basket comparison website such as mySupermarket.com can save on your weekly shop. MySupermarket.com reckons its users save an average of 30 per cent on their weekly shop. The average weekly food bill in the UK, according to the Office for National Statistics, is about £59. So in theory, this could come down to around £40. For store cupboard items such as tea, coffee, cereal, dried beans and pasta, consider buying in bulk to save using websites such as eatbig.co.uk - if you have the space to store it all.
4. Cut your broadband costs
Finder says that the average fast unlimited plan from the top four providers (BT, Sky, TalkTalk and EE) is £284.79 per year, compared to the best 12-month, fixed rate deal by Origin Broadband at £203.88 per year.
5. Car and home insurance
A two-car household could save nearly £130 a year by switching to the cheapest available car insurance deal. Finder suggests that significant savings can also be achieved by reviewing the extras included in the cover, the size of the excess and the installation of a black box and/or dashboard camera. Switching to the cheapest home insurance provider can save households about £38 a year, according to Finder. So don’t always accept the renewal quote.
6. Cut your credit card and loan outgoings
The average household credit card debt is £3,200, based on two cards per household (an average debt per card of £1,600). Finder compared the average household credit card debt with an average interest rate of 17.97 per cent to a balance transfer credit card of 0 per cent over 40 months. You could save £698 per card or £1,395 for two cards over the year in interest. The website also compared the average personal loan amount of £2,080 that has an average interest rate of 15.2 per cent and a typical three-year term, to the lowest unsecured rate on the market, currently 7.4 per cent. The difference in interest charges per year is £92.43, and over three years the total savings is potentially £277.28. You can switch from an existing personal loan to a new one at any time to take advantage of potentially cheaper rates. If you want to reduce the amount you spend monthly on debt repayments and don’t mind paying over a longer term, some lenders will offer you debt consolidation loans. Remember, if you are making new applications for credit you should check your credit score first.
7. Cut your housing costs
We spend the biggest proportion of our incomes on housing, whether that is rent or mortgages. If you want to reduce rent, you may have to wait until your contract period is up to either negotiate or find somewhere cheaper. The cost of renting is currently falling, according to Countrywide, which may put you in a position to negotiate. If you have a mortgage and are on your lender’s standard variable rate or a deal that allows you to move free of charge, you could find a cheaper rate and switch. The average mortgage size is £85,000 on an average home price of £215,847. By switching from the average standard variable home loan rate of 4.54 per cent to one of the cheapest variable rates on the market (the average initial rates of the top 5 home loans is 1.02 per cent and average comparison rate is 4.14 per cent) borrowers could potentially save £1,107.80 a year, says Finder. Even after paying arrangement fees.
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Money Means is a news and information series written by independent financial and consumer journalists and experts. FSCS launched Money Means in 2016 to help give people clear and useful information about personal finance, to increase their understanding and confidence when dealing with money.