Families have been given expert advice on how to overhaul their finances and stop overpaying for ten common items and services.
Personal finance gurus at price comparison site Tiger.co.uk have unveiled ways in which UK households could save hundreds of pounds annually by reassessing their budgets and making minor adjustments to their expenditures.
With soaring inflation and the ongoing cost-of-living crisis putting pressure on household budgets, it’s more crucial than ever to cut back on unnecessary spending.
Energy bills, food costs, and mortgage payments have skyrocketed, leaving many families seeking inventive ways to make their income go further.
Consequently, recent data from the Office for National Statistics (ONS) shows that approximately 60% of adults are reducing non-essential spending due to rising living costs, and around a third of adults are finding it very or somewhat challenging to cover their rent or mortgage payments.
Given these pressures on households, even modest savings can make a substantial difference.
With Christmas coming up, it might be worth checking your subscription services and direct debits for potential savings (Image: Getty)
However, many people are oblivious to the extent of their overspending on everyday products and services, often due to convenience or habit.
These seemingly insignificant decisions, from allowing insurance policies to auto-renew to sticking with outdated phone contracts, can accumulate hundreds of pounds a year in additional expenses.
Savings guru and Tiger.co.uk’s Managing Director, Ian Wilson, has offered timely advice for consumers looking to economise in the face of rising living costs. He stated: “With the high cost of living presenting more challenges than ever, many families are looking for ways to trim their budgets – particularly in the run-up to Christmas.”
He further added: “People are still frequently paying more than they need to for everyday expenses, but the good news is that with a little extra planning and some savvy shopping, significant savings can be made – whether it’s by switching to a more affordable mobile plan, cutting back on unnecessary subscriptions, or comparing prices for things like train tickets and car insurance.”
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Ten overlooked areas where households may be overspending:
1. Extended warranties can often be an unnecessary extra as electronics and appliances usually have adequate protection included. Under the UK Consumer Rights Act, items could be covered against faults for up to six years.
Credit card companies might offer purchase protection benefits, so Wilson advises checking existing coverage before shelling out for additional warranties.
2. Gym memberships also make it to Wilson’s list, as he points out that costly memberships may not be value for money if usage is infrequent. Consumers should weigh up how often they use the gym against the expenses incurred.
If not, consider more affordable alternatives such as community gyms, budget-friendly chains, or free outdoor workouts. Online workouts and fitness apps can also help you stay fit without additional spending.
3. Insurance add-ons: People often buy add-ons like gadget or travel insurance without checking if they are already covered under their existing insurance policies or credit cards.
Before purchasing add-ons, check your existing policies or credit card benefits to see if you’re already covered. For example, many credit cards include travel insurance and comprehensive home insurance, which often covers personal gadgets.
4. Bank fees: Hidden fees for overdrafts, account maintenance, or international transactions can add up quickly, especially if people aren’t aware of them.
Brits warned of ten services they’re probably overpaying for (Image: Getty)
Switch to a bank that offers fee-free accounts, or set up alerts to monitor your balance and avoid overdraft charges.
5. Mobile phone contracts: Many people are locked into long-term contracts with their mobile providers, which normally leads to them paying for more data, minutes, or phone features than they actually need. If you want to save some money, review your usage and compare it to your plan.
If you’re paying for a lot of unused data or minutes, consider switching to a SIM-only deal or pay-as-you-go option, which is often significantly cheaper. Check comparison websites to compare options.
6. Subscription services: Streaming services, digital magazines, fitness apps, and subscription boxes can all add up, particularly when individuals forget to cancel unused subscriptions. It’s crucial to regularly review all your subscriptions and cancel anything you no longer use or downgrade to lower tiers if premium services aren’t necessary.
7. Train tickets in the UK can be notoriously pricey, especially if purchased last minute or during peak hours.
Many people often overlook discounts or cheaper travel options, so planning ahead and booking train tickets as early as possible is key, as advance fares are typically much cheaper.
Utilise railcards for a 1/3 off fares, and for regular travel, consider season tickets or split ticketing (purchasing separate tickets for different parts of the journey), which can be more cost-effective than buying one through ticket. Apps can assist in finding the best deals, and travelling off-peak or with flexible tickets can also save money.
8. Car insurance renewal in the UK often sees drivers allowing their car insurance policies to auto-renew annually without seeking a better deal, resulting in higher prices. Always shop around before your policy is due to renew.
Use comparison sites to find cheaper deals, and don’t hesitate to negotiate with insurers. Paying annually instead of monthly can also save money, and purchasing 15-24 days before your car insurance is due for renewal can save between 33-45%.
9. Online delivery fees can also add up. Frequent online shoppers can find themselves racking up substantial delivery fees over time, particularly for small, regular purchases.
If you often order from the same retailers, it could be cost-effective to invest in a delivery pass. Alternatively, try to bundle your orders to reach free delivery thresholds.
10. Car maintenance and repairs are another area where consumers can unwittingly overspend.
Many people accept the first quote they receive from a dealership or garage without shopping around, potentially leading to inflated costs for routine maintenance or repairs. Instead, consider getting multiple quotes before committing to any work.
Independent garages can often offer cheaper rates than dealerships, and for standard services like oil changes or MOTs, price comparison websites or apps can help you find the best deal. Regular car maintenance can also prevent expensive repairs in the future and ensure your car insurance remains valid.
