If you’re finding it hard to make ends meet after paying your household bills each month, it’s worth looking at ways you might be able to reduce these costs.
Lots of us fork out huge sums to cover all our regular outgoings, such as gas and electricity bills, mortgage payments and insurance premiums, without checking if we might be able to find better deals. If you haven’t reviewed your household bills for a while, there’s a chance you could be missing out on savings which could potentially run into hundreds – or sometimes thousands – of pounds a year.
Here’s our rundown of seven ways you might be able to save on your household bills.
1. Mortgage payments
Your mortgage is likely to be your biggest monthly expense, so it’s essential not to pay more than you need to. If you’re on your lender’s standard variable rate (SVR), then you can usually make substantial savings by remortgaging to a cheaper deal. The SVR is the rate that you typically roll onto automatically once your mortgage deal finishes and tends to be much higher than other mortgage rates.
According to the financial regulator the Financial Conduct Authority (FCA), there are around 800,000 homeowners who have been on their lender’s standard variable rate (SVR) for six months or more and could be better off if they remortgage. For example, someone with a £150,000 repayment mortgage with 15 years left to run who is borrowing 60% of their property value would be paying £1,141 a month if they were paying a typical SVR of 4.41%. Their monthly payments would fall to £910 a month if they remortgaged to a two-year mortgage rate of 1.19% – a saving of £231 a month or £2,772 over a year.
This free tool to compare mortgages allows you to compare mortgage deals from the whole of the market and find out how much they could save you. If you’re nervous about switching lenders, it is still worth filtering for deals from your existing lender (which you can do using the comparison tool) so you can see how much you could save if you remortgage with them.
Alternatively, if you need any help or advice, we’ve chosen to partner with Fluent Mortgages to offer free, expert advice. They will be able to talk you through the options available to you and recommend which remortgage deal is likely to be most suitable for your individual needs.
You can also set a remortgage reminder notification with Rest Less if you’re midway through an existing deal and we’ll get in touch to remind you nearer the date your mortgage deal expires.
2. Energy bills
With wholesale energy prices recently having reached a three-year high, gas and electricity bills are likely to be burning a bigger hole than usual in your pocket every month.
Dig out your latest bill to find out which tariff you’re on and see whether you might be able to switch to a cheaper deal.
If you’re on a variable rate tariff, you’ll usually be able to move to a different deal without penalty, but always check with your supplier first. If you’re free to move, you can see if you can reduce your energy bills with this energy comparison tool. Over half of Rest Less users (51%) who have switched using the tool have cut energy costs by an average of £167 a year, and one in 10 have saved £340 a year.
You might also be able to reduce costs by setting up a direct debit to pay your energy bills each month, if you haven’t done so already.
Stephen Murray, energy expert at MoneySuperMarket.com said: “If you’re one of the 7.1m households that are not paying their energy bills via direct debit, you might want to reconsider. Not only is paying by direct debit easier, it will most likely be cheaper, because most suppliers often offer a discount to customers that pay by direct debit.
“Recent developments have also made paying by direct debit more attractive. New Ofgem proposals concerning ‘in credit’ balances will require energy suppliers to automatically repay any direct debit customers that are more than 5% in credit, putting an end to customers having to request their money be repaid in the event that their account is in surplus.”
Find out more in our article Four reasons why you should switch energy supplier now.
3. Insurance premiums
When your car or home insurance is up for renewal, don’t be tempted to automatically accept the quote offered by your existing providers. Insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim, so there is little reward for staying loyal to the same providers. To keep costs low, it’s essential to shop around for cover.
If your car insurance is coming up for renewal soon, you can compare car insurance quotes from over 110 UK providers using the following tool to compare car insurance.
And if your current buildings and contents cover is soon up for renewal soon, you can compare quotes from over 50 UK providers and switch online using the following home insurance comparison tool.
If your car insurance renewal date isn’t for several months, don’t worry, but don’t miss out – let us know your renewal month here and we can send you a reminder nearer the time.
If you’re looking for other ways to save money on car and transport costs you might want to consider our money saving guide Eight ways to save on car and travel costs.
Don’t forget too that if you have a four-legged friend you insure, it’s worth reviewing their premiums regularly too to see how they stack up against the competition. Some of the bigger names include Petplan.co.uk, Boughtbymany.com, Animalfriends.co.uk*, and the charity RSPCA.org.uk. You can get a pet insurance quote using this tool on our website.
When did you last review your broadband deal? If the answer is months, or even years ago, you may well now be on your suppliers’ default deal, which according to Uswitch.com, means on average you’ll be paying £114 a year more than you need to.
You can compare home phone and broadband deals quickly and easily using our broadband comparison service. Simply enter your postcode, and your current provider and the service will come up with the deals available to you. You can reduce the number of options available to you by entering your specific requirements, such as your maximum budget, the speed you’re looking for, how much data you need, and how long you want your contract to be.
Even if you’re reluctant to switch providers, it’s still worth taking a look at the best deals available on the market – as if you call your existing provider and tell them that you’ve got your eye on a great deal with another provider, you’ll put yourself in the best possible negotiation position to get a better deal from them.
5. Mobile phone
Mobile costs are often something that we fail to regularly scrutinise, so if you’re out of contract with your existing provider, you might be surprised at how much you could save.
To help we’ve written a comprehensive guide to demystify the mobile phone switching process which hopefully places you in a stronger position to make sure you’re not overpaying for your mobile phone.
You can also use this mobile comparison service, which compares the best SIM-only deals and handset deals in the market.
Keeping on top of your mobile phone bills is especially important at the moment, when many of us are spending more time working from home than we did prior to the pandemic.
The cost of life insurance and other forms of protection will vary quite a bit depending on your circumstances and how big you want any payout to be.
Insurers will take a few factors into account when calculating how much you will pay per month for life insurance. These include:
- Your age
- Your health and medical history
- Your lifestyle and hobbies
- Whether you smoke
- The length of the policy
- The desired payout
If your circumstances have changed – for example, you’ve stopped smoking, or given up a potentially dangerous hobby – it’s worth seeing if you might be eligible for lower insurance premiums.
Always shop around before you purchase a policy, or use a life insurance broker such as Anorak to do the hard work on your behalf.
7. Council Tax
Council Tax bills jumped by 5% for millions of homeowners in April, with annual costs often well in excess of £1,000. Yet not everyone is in the right band, which means some people could be paying more than they need to. For example, if you live in a terraced street and neighbouring properties that are almost identical to yours are in a lower band, you might be paying too much.
If you want to challenge your Council Tax band, you’ll need to get in touch with the Valuation Office Agency and ask if they’ll review it, explaining the reasons why you think the band you’re currently in is wrong. You can contact the Agency by email at [email protected], or by calling 03000 501 501 if you’re in England, or 03000 505 505 if you’re in Wales. You can find out more about challenging your Council Tax band at GOV.UK.
Bear in mind that challenging your band isn’t without risks as you can be moved up or down a band, so you must be absolutely confident that you’re in too high a band before you appeal.
If your income has fallen or you’ve started claiming benefits, it’s also worth seeing whether you might be eligible for a Council Tax bill reduction.
The reduction you’ll get will depend on where you live, your circumstances, your household income and whether you have children or other dependents living with you. For example, if you are the only adult living in a property you can apply for a 25% council tax. You might also be eligible for a reduction if you’re a carer or live alone. You can find out if you might be eligible and apply for a council tax reduction here.
We hope you found these ideas useful. Do you have any other ways to reduce household bills to share? If so, we’d be interested in hearing from you. You can join the conversation on the Rest Less Community forum or leave a comment below.