The coronavirus pandemic is hitting people’s incomes hard, so many of us are finding ourselves looking at ways we can reduce our outgoings to help us make ends meet over the next few months.
With that in mind, here are 15 simple ways to cut costs and give your bank balance a boost.
If your income has reduced, you’re going to have to rein in your spending and one of the best ways to do this is by working out a monthly budget.
Start by working out how much money you will need to cover your monthly essentials including, for example, your rent or mortgage, utility bills, Council Tax and any other debts, such as credit cards and/or personal loans. Once you’ve done this, you should have a clearer picture of how much money you have to spend on areas such as your weekly shop. Citizens Advice has a useful free budgeting tool to help you understand what you’re earning and spending and where you might be able to cut costs.
Cancel or pause subscriptions
If you’re having to get by on a reduced income, your focus should be on covering essential costs such as your mortgage or rent, utility and food bills and cutting back on non-essential spending.
Subscriptions, whether they’re to a magazine, gym, TV streaming service or anything else are often a good place to start. The Money Advice Service has a useful Quick Cash Finder tool which enables you to see how much you’d save by cancelling some of the things you regularly spend money on.
Many gyms, including Pure Gyms, Virgin Active, Bannantyne’s and David Lloyd, frozen their membership fees without penalty due to the coronavirus crisis.
It’s almost certainly worth having a quick look through your bank transactions and credit card statements over the last few months to remind you of what regular payments come out. You may be surprised at some of the things you are still paying for, but don’t need or use any more….
Cut energy bills
With more of us working from home, our energy bills are likely to be higher than usual for this time of year, so it’s important to look at ways you might be able to reduce your costs. At the same time, energy costs are the lowest they’ve been in years making this a great time to switch supplier – and thankfully it’s never been easier.
According to the energy regulator Ofgem, over 11 million households are on expensive default energy tariffs, and are almost certainly paying more than they need to for their gas and electricity. Check out our article Four reasons you should switch energy supplier now to find out more.
We know it can seem daunting, or uninteresting, but if you are on an expensive default tariff, switching supplier is one of the easiest ways to save money every month. In a bid to encourage competition and save consumers money, the regulator has made switching energy supplier incredibly easy and the whole process can be completed online in just 10 minutes – with only meter readings to follow.
Use our energy switching service to get started – even if you don’t want to switch right now, you might be curious to see how much you could save each month.
You can also look at ways to reduce your energy consumption, for example, by making sure you don’t leave electrical goods on standby. Find out more about energy-saving measures in our article Save money on your energy bills.
Reduce Council Tax bills
If you don’t think you’ll be able to afford to pay your council tax because you’re now on a lower income or claiming benefits, you might be eligible for a council tax reduction which could reduce your bill by up to 100%. What you get will depend on where you live, your circumstances, your household income and whether you have children or other dependents living with you. discount. You can apply for a council tax reduction here. 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. For example, if you are the only adult living in a property you can apply for a 25% council tax discount.
If you don’t qualify for a reduction, you may still be able to ask your council whether you might be able to take a break from payments for a month or two. The support available varies from council to council so its worth contacting your local council to find out what help they can provide – you can find their contact details here.
Switch to own brands
Supermarkets are seeing unprecedented demand for food and household essentials at the moment, which can mean there’s often a limited range of options to choose from.
However, if you do find a shop where there’s good availability, or if you’re able to complete your food shop online, choose own brand items rather than sticking to the names you know. According to research by the Good Housekeeping Institute, switching just seven branded products you buy regularly to non-branded equivalents could slash as much as around £240 a year off your shopping bills.
Check out yellow sticker shelves at the supermarket too, which are home to discounted items that are about to reach their sell-by date. Discounts are often applied in the evenings, so if you are able to plan your shop for later in the day you should be able to pick up some bargains.
Your mortgage is likely to be your biggest monthly outgoing, so check the rate you’re currently paying and see if you might be able to reduce your monthly payments by remortgaging. If you’re on your lender’s standard variable rate, you’ll almost certainly be able to cut costs, and savings can be substantial.
For example, someone with a £100,000 mortgage with 10 years left to run on an SVR of 4% would currently pay £1,012 a month. If they were to remortgage to a two-year fixed rate at 1.19%, monthly payments would fall to £884, a saving of £128 a month or £1,536 a year. Bear in mind that many remortgage deals come with arrangement fees, so you’ll need to factor these in when calculating how much you’ll save.
You can use our mortgage comparison service to compare remortgage deals from the whole of the market and find out how much you might be able to save. If you are nervous about switching lenders, it is still worth filtering for deals from your existing lender so you can see how much you could save from remortgaging with them. Our mortgage comparison service allows you to compare the best rates from both your current lender and the whole of the wider market, quickly and easily. Alternatively, fee-free mortgage brokers such as Fluent Mortgages or London & Country Mortgages should be able to talk you through the available options and work out the sums on your behalf.
If remortgaging isn’t an option as you have lost your source of income, or you’re struggling to cover costs , you may be able to take a mortgage holiday to help relieve the short term financial pressure. Originally payment holidays were only available for three months, but it’s now possible to take a break for up to six months. Bear in mind though that your payments are only going to be deferred, which will mean steeper costs when you restart your mortgage payments. You can see the impact a mortgage payment break will have on your future payments using our mortgage payment holiday calculator. Find out more about how mortgage payment holidays work in our article Everything you need to know about taking a mortgage payment holiday.
Alternatively, you might be able to move your mortgage from a repayment basis to an interest-only basis to reduce your monthly costs until you’re able to get your finances back on track. If you think you might need help with your mortgage payments, talk to your lender as soon as you can about which options might be available to you.
Reduce your other borrowing costs
If you’re looking to cut the cost of other debts, such as credit card bills, consider switching any balances on cards charging high interest rates to a 0% balance transfer card.
For example, cards such as TSB’s 30-month Platinum balance transfer card and MBNA’s 29-month 0% balance transfer card enable you to repay what you owe gradually without being hit by hefty interest rate charges. Make sure you pay off what you owe within the interest-free period though, as after this period ends interest on the TSB card shoots up to 19.95%, or 20.93% on the MBNA card.
Bear in mind that there will also be a balance transfer fee when you move your balance across. TSB’’s card has a 2.95% balance transfer fee, whilst MBNA’s is 2.75%. These fees are usually added to your balance, so you won’t have to make an up-front payment. Find out more about the TSB card and the MBNA card.
Consider a water meter
Many people have fixed water bills which are based on their home’s size rather than the amount of water they use. Depending on how many people are in your household, you might be able to save hundreds of pounds a year by switching to a water meter if you’re not already on one.
As a general rule, if you’ve got the same number of bedrooms in your property as people, or more bedrooms than people, a meter will probably save you money. If you decide to switch to one, you’ll usually have a trial period of 24 months, during which time you can switch back to your old fixed charges. This won’t be possible in all areas, however, as in some locations compulsory metering is being introduced. The Consumer Council for Water has a helpful water meter calculator to help you work out whether you could save money by moving to a meter.
Reduce insurance bills
If your home or car insurance is soon up for renewal, make sure you don’t automatically accept the quote offered by your existing provider. There’s no reward for staying loyal to your insurer – in fact you’ll probably find prices creep up every year, even if you haven’t made a claim.
It’s therefore essential to always shop around for cover so you can keep your insurance costs to a minimum. There are lots of comparison sites, such as MoneySuperMarket, Confused.com, GoCompare and Compare the Market, which enable you to compare costs quickly and easily.
Protect yourself from steep mobile phone and broadband costs
It’s also worth checking with your mobile and broadband providers to see if you might be able to move to an alternative cheaper tariff to help reduce your monthly bills. If you are out of contract, you’ll almost certainly be over-paying and if you’re not, the chances are you’ll be using your mobile and broadband more than normal, so make sure you’re on the most appropriate package. Find out more about How to find the best broadband deal.
If you’re nervous about overspending, ask your provider to set a spending cap so that you won’t be able to exceed your data allowance and rack up any unexpected charges. This is especially important at the moment, when many of us are working from home and want to stay connected whilst we are isolated at home. There should be no need to stop contacting your friends and family remotely, but it’s definitely worthwhile making sure you do it in the cheapest way possible.
You can usually arrange this online through your account with them, or you can contact them by phone. Always make sure you use WiFi wherever possible too to reduce the amount of data you use.
You can compare broadband deals quickly and easily using our broadband comparison service. All you need to do is enter your postcode, and your current provider and the service will come up with the deals available to you. You can narrow down your options by specifying your budget, the speed you’re looking for, how much data you need, and how long you want your contract to be.
Make your food go further
UK households waste 4.5m tonnes of food each year that could have been eaten. This food has a value of £14 billion, equivalent to £700 a year for an average family with children, according to the Waste and Resources Action Programme (WRAP).
To make sure your food goes as far as it possibly can, write a meal plan each week and make use of everything you’ve got in the cupboard. You can download and print off a free planner here.
If you’re looking for ideas, Cookingonabootstrap.com has lots of great recipes and tips on reducing food waste. Never overlook the magic of leftovers as they’ll save you both time and money. Always put leftover food into a tupperware container and save it for lunch or dinner the next day. You’ll appreciate it when you don’t have to spend your lunchtime or evening cooking an entirely new dish.
Don’t condemn overripe fruit or veg to the food waste bin either. For example, overripe bananas provide a stronger and sweeter banana flavour when used in a banana bread recipe, and soft avocados can be mashed easily and combined with a few simple ingredients such as red onion, garlic and a hint of lemon or lime juice to make a delicious guacamole. You can also blend overripe fruit into tasty, healthy smoothies.
It’s also worth signing up for Olio, a food-sharing app that connects you to your local community with the aim of reducing waste, and saving money. You can list anything on the app that you won’t be eating in your household but hasn’t yet gone off. Alternatively, you can search for food or other items that are being offered within your local area for example, a nearby neighbour might be offering loaves of bread,or bags of spaghetti – but you may also find other items such as toiletries and books listed. You can download Olio free of charge for iOS here and Android here.
If you’re struggling to afford food, or you’d like to make a food donation, contact your local food bank via the Trussell Trust website.
When shopping online, always check to see if there is a discount voucher available which can get you money off your purchases too. Sites where you can see current voucher codes include Vouchercodes.co.uk and Groupon.co.uk. Simply enter the name of the retailer you’re buying from and these sites will let you know if there are any discounts available.
Earn cashback when you spend
If you’re going to make a purchase online then try heading to one of these websites first and following the link to the company that you were going to make the transaction with. If the company is affiliated with the cashback site, you could receive some money back on your purchase. According to Topcashback, members receive an average of £325 per year in cashback, which is available on a wide range of goods and services, from broadband to insurance, energy plans, and garden furniture. Cashback rates vary widely – you could get 1% cashback on one purchase and as much as £150 cashback on another from a different store.
Claim back travel costs
If you used to commute prior to government advice to stay at home, you may have a rail season ticket that you no longer need. You can get a refund for any ticket that will no longer be used, so get in touch with the train company or the website you bought the ticket from to find out how much you might be entitled to. Alternatively, you can request a refund from the ticket office managed by your train operator. You can find contact details for the different train operators at National Rail.
To be eligible for a refund, you must have at least seven days left unused on a monthly or longer season ticket, or at least three days remaining if you’ve bought a pre-paid weekly ticket. If you have an annual ticket, some operators require that you have three months remaining for you to qualify for a refund.
You can also get an Oyster card season ticket refund if you’ve got six weeks left on an annual ticket, seven days left on a monthly ticket or three days left on a seven-day ticket. You can apply for an Oyster refund by calling 0343 222 1234 (the line is open from 8am to 8pm seven days a week and call charges may apply). Find out more at the Transport for London website.
Make do and mend
As we won’t be able to get out to the shops other than for essentials, it’s important to get every single ounce of use out of the things we have already.
Many of us may have more free time than usual during this period, so it might be a good idea to learn how to repair items we might otherwise have thrown away and replaced, such as clothes with holes in them or with lost buttons. YouTube has thousands of explanatory videos on how to sew and fix things for example.
You could also look at ways you can use items you already have rather than buying new stuff. For example, you can make your own cleaning products without forking out for them in shops. Vinegar mixed with water can be a great way to clean glass and bicarbonate of soda makes a good alternative to carpet freshener.
These are really difficult times, but we will get through them. Even if you’re not feeling the pinch at the moment, planning ahead and looking at ways you might be able to save money could help ease some of the financial pressure if that changes.