Matthew Wall, Tuesday March 04, 2008
UK householders are drowning in a sea of bills, with the average family now paying over £40 each day, according to new research from Citizens Advice - that's a crippling £15,000 a year. Find out how to claw some back
Water industry regulator Ofwat announced this week that water prices in England and Wales will rise by an average of 18% between 2005 and 2010 under the latest price review - just the latest increase in the cost of living to hit hard-pressed homeowners.
This year alone homeowners have suffered double-digit price hikes for gas and electricity and above-inflation rises in water and council tax. Our main bills, such as council tax, gas, electricity, water, fixed-line telephones, home insurance and TV licences, have soared to £3,426 for the typical UK household, according to a new survey from debt charity Citizens Advice.
And the pain doesn't end there. Once you add on the cost of the average mortgage, the total bill comes to more than £15,000 - or £42-a-day.
How bills have risen
Mortgage costs have increased not only as a result of last year's interest rate rises by the Bank of England but also because lenders have tightened their lending criteria in response to the credit crunch and the fallout caused by the Northern Rock crisis.
Since 2003 British Gas customers have seen their gas bills balloon from £370 to £653 (+77%), and their electricity bills soar from £237 to £413 (+74%), pushing the total annual energy bill to well over the £1,000 mark. All but one of Britain's 'big six' energy firms have imposed price increases of more than 15% since the turn of the year. Elsewhere, council tax is slated to rise by 4% or 5% from April and water bills will rise by an average of 5.8%.
And with the multi-million pound clean-up cost of last year's floods hitting insurance companies hard, home insurance premiums are also set to rise sharply - so it's important to make savings where you can. We show you how.
Gas and electricity
There are two simple ways to save money on your gas and electricity bills. The first is to see if you can save by switching to a cheaper energy supplier - the second is to see if you can move to a cheaper energy package. You could save as much as £300 by moving from a traditional tariff to a dual-fuel deal and paying by direct debit.
It's easy to find a cheaper supplier - use a price comparison website to track down a better deal. Before you start, make sure you have recent bills to hand so that you can input your gas and electricity usage data or bills into the calculator. The great thing about switching energy supplier is that nothing physical needs to happen in the home - you just get a different supplier name on the bill.
Find a cheaper energy supplier
Water bills
Cutting your water bill is trickier because there is no competition in water supply for domestic users - but if you think you could use less water it might be worth having a meter installed.
Most customers pay a fixed bill based on the rateable value of their home, whereas water meter users simply pay for what they use. But be careful: people with large families could end up worse off going to a meter.
There are significant savings up for grabs. Estimates from Thames Water show that a single person restricting their usage to around 70 cubic metres of water a year could save around £130 if they switched to a meter.
Your mortgage
Addressing what is probably the biggest expense of your life is a must. Nearly one in three mortgage customers (29%) have had the same deal for 10 years or more, according research from online mortgage company, mform.co.uk. But with last month's cut in the base rate to 5.25% - and with further rate cuts predicted for 2008 - it's time to shop around for a better deal.
For example, getting off Halifax's Standard Variable Rate (SVR) of 7.25% and onto its two-year tracker rate of 6.04% will save you £138 a month on a £200,000 repayment mortgage - while switching to a new lender entirely could save you even more cash. Remember, however, to budget for any fees.
Find the right mortgage for your needs
Council Tax
You may be able to claw back some council tax by challenging the banding your property was originally designated back in 1991, when they sorted all properties into valuation bands from A to H. Many of these valuations were wrong - so if your property was overvalued at the time you could be paying more tax than you need to.
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