You've been paying your bills all wrong – and simple tips could help you cut hundreds of pounds a year12/22/2021
HOUSEHOLD bills are soaring, but are you adding to your outgoings by making some common mistakes?
From energy costs to petrol prices and groceries, millions of people are feeling the effects of the cost of living crunch.
But if you're making some common mistakes, it's likely you're shelling out more than you need to.
From car insurance to heating bills, we've got some simple tips that will slash hundreds of pounds off your outgoings.
This sounds like an obvious one, but every year millions of people forget to do it.
If you let your insurance policy automatically renew, you're most likely not getting the best deal.
A rule change in January 2022 means insurers can no longer give better offers to new customers, but that doesn't mean you shouldn't shop around.
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The same goes for your mobile phone, broadband and energy bills.
Ryan Fulthorpe, spokesman for GoCompare said: "Never accept the first price you are given on a renewal or quote on your outgoings.
"It's always worth checking the rest of the market to see how that initial offer stacks up."
Use a comparison site such as GoCompare or Confused.com to check prices – and don't just opt for the cheapest policy, make sure it fits your needs.
Get the right product, not the cheapest
That brings us neatly to the next point – which is don't automatically opt for the cheapest deal on the market.
But if your policy doesn't provide you with the level of cover you need, it'll end up costing you more in the long-run.
For example, if you buy a cheap motor policy but drive a lot of miles you might consider a deal that includes breakdown cover.
It's not a legal requirement, but if you breakdown a long way from home, it could cost you hundreds of pounds.
Meanwhile, a cheap broadband deal might not offer the speeds you need to work from home or streaming the shows you want to watch – and there might be download limits.
Paying for insurance in monthly instalments might feel like a more pocket-friendly option but it's costing you.
When you pay by monthly direct debit you'll also be paying interest on your premiums.
You can save serious sums by paying upfront in one go for things like car and home insurance.
Fulthorpe said: "Paying annually will bring the cost of your premium down, as essentially paying monthly for insurance is a loan and most insurers add interest to the payments."
Comparison sites will often give you the option to browse annual or monthly prices so you can see the difference.
And added benefit of this is you're less likely to get caught out by an auto-renew, meaning you can shop around for the best deal next time it's time to buy.
Being brave enough to question the price you're given can often save you cash, especially if you've been with the same provider for a long time.
We've heard lots of success stories of people negotiating on their TV package or broadband bill – one customer saved more than £700 on her Virgin Media plan.
According to GoCompare, a third of Brits have never switched their broadband provider.
If you're one of them, you're probably overpaying – that's because your monthly bill will go up once the introductory offer is over.
If you're planning to haggle, make sure you're polite and come armed with prices of comparable deals that you could get elsewhere or if you were a new customer.
Uswitch said: “Once you’re armed with a better deal, speak to your provider and tell them you have found something new. If they hear you’ve taken the initiative to look elsewhere, they may be more open to negotiation.
“Some providers are more open to haggling than others though, so don’t expect it to work in every situation.
"It’s also worth noting that you are only really able to do this when you’re out of contract and can leave the provider freely."
Check the small print
Before signing up to any service, it's important you check the details.
On broadband, check the speed you'll get or any download limits, for example, and with insurance, make sure you know how much excess you'll pay if you make a claim.
There's no point shelling out for a service that doesn't meet your needs – going over download limits could result in extra charges, and a high insurance excess could stop you claiming if you can't afford to pay it.
Uswitch said: “With your mobile phone, make sure your deal hasn’t ended and you're not being charged for a handset you've paid off.
“Moving to a SIM-only deal is a great way to save money, as you won’t be covering the cost of a new phone."
If you're still in contact and struggling to pay each month, you should still speak to your provider – they might be able to move you to a more affordable package.
Use cashback sites
Cashback sites essentially pay you for your purchases.
You sign up to websites like Quidco or Topcashback and click through these to get to the retailer you want to browse.
You should only use cashback for purchases you were going to make anyway – as the payment is never guarantee – which makes insurance a great candidate.
And some of the best cashback deals are available on insurance products.
When we checked, we spotted cashback of up to £90 if you bought from More Th>n, and up to £78.75 back on a Petplan pet insurance policy.
Do your research
While switching to a new provider is usually a sure-fire way to get the best deal, it pays to do your research.
For example, at the moment, switching to a new energy provider is probably the worst thing you could do.
Fulthorpe said: "While the energy market is in a state of flux, this is an area where it may not be as simple to switch and save – but there are still ways to save on your bills just by controlling your usage."
Simple steps like turning the thermostat down can really make a difference.
Uswitch estimates that households could save £50 a year or more for every degree they dial down.
Turn lights off when you leave a room, replace old bulbs with LED ones, and bleed your radiators to make sure they're running efficiently.
We've also looked at the worst appliances to leave on standby and how spending £3 could save you hundreds.
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