MORTGAGE meltdown, combined with rising food and energy bills, will see already stretched household budgets put under further pressure.
Families face an average increase in household bills for water, gas, electricity and council tax of 8.3% this year; a rise of nearly £200. In addition, a basket of staple food items costs 17% more than a year ago – and is set to rise even more.
T
hose with big mortgages face the biggest headaches. Around 400 more mortgages were withdrawn from the market last week, as lenders pulled their loans for higher risk borrowers.
If you are feeling the pinch, there are a number of ways you can cut back on your monthly outgoings. We show you how to slice nearly £4,000 off your annual expenditure.
RemortgageNew research from Abbey Mortgages reveals that a whopping £25m is wasted collectively every day by people who are not on the most suitable mortgage deal for them.
Five million Brits admit they are not on the most competitive deal – which Abbey says could be costing each of them in the region of £5 a day.
If you are paying a lender's standard variable rate (SVR) or near the end of a fixed rate period, then remortgaging will almost definitely save money.
David Kuo, head of personal finance at money website Fool.co.uk, says: "Homeowners with a £100,000 mortgage could be faced with a £200 jump in monthly repayments if they are forced on to their lender's standard variable rate."
Speak to a mortgage broker who can help you compare the different deals on the market.
Saving: About £200 a month (£2,400) if you have a £100,000 mortgage and transfer from your lender's SVR to the most competitive deal.
Switch credit cardsNearly six million consumers switched credit card providers in the past six months.
Shop around for a card with a 0% introductory offer on balance transfers.
If you regularly spend on your card but do not always pay off the full balance every month then look for a card with a 0% offer on purchases.
Saving: £160 a year if you switched a £1,000 balance from a card charging the average 16% APR to a 0% card.
Switch energy supplierAccording to uSwitch, you could save up to £325 a year by switching to the cheapest gas and electricity supplier in your area.
A host of comparison websites such as uSwitch.com, Moneysupermarket.com and energyhelpline.com provide data on the cheapest tariffs available. Just type in your address, your current supplier, the annual or monthly charge and some details about your living arrangements.
Savings: Up to £325 if you have never switched before.
Broadband/phone/TVIf you have broadband at home it is a good idea to check whether you are on the best package for your needs.
A number of firms now offer "bundles" where you pay one monthly price for your home phone service, broadband and digital TV. Tiscali, for example, offers TV, phone and broadband bundles starting at £15.99 a month.
Although these deals can be tricky to understand, help is at hand from a new service which claims to demystify the process of picking the best digital TV, broadband and phone products. Simplify Digital (simplifydigital.co.uk) offers expert consultations over the phone and can even book product installations.
"With our help finding the best bundle, we could certainly put money back in people's pockets," says Charlie Ponsonby, CEO of Simplify Digital, "It's vital that families do their research in order to get the perfect package."
Savings: Up to £14 a month or £168 a year if you switch from a basic Sky bundle to Tiscali.
MobileIf you have never switched mobile networks or tariffs before, chances are there is a better deal out there for you.
According to price comparison site Moneysupermarket.com, half of all monthly contract customers do not know how many minutes and texts they use each month, meaning they could be paying for an allowance they don't use.
Rob Barnes, head of mobiles at moneysupermarket.com, says: "Consumers should check their monthly bill regularly and look at what they are currently using in terms of minutes, texts and cross-network calls. It's also important for people to be aware of outside bundle charges, as this is where they can be hit the hardest."
To cut costs, first give your existing network a call. Their customer retention team will have access to a range of cut-price tariffs designed to stop customers being lured away by competitors. If they can't help, websites such as onecompare.com and uSwitch.com can compare different networks' offerings for you.
Savings: £15 a month or £180 a year if you switch from a £30 a month tariff to T-Mobile's Flext 20 tariff.
Water If you pay water rates – rather than a bill derived from a water meter reading – you could be paying too much for your water.
Most properties receive a water bill based on the property's 'rateable value'. This is calculated on the size of the property, its general condition and availability of local services. However, it doesn't take into account how many people live in the property or how much water is used.
A cost-effective alternative is to ask your water company to fit a water meter and bill you according to usage. Chances are, if you have fewer people than bedrooms in your property, having a water meter will save you money. And the less you use, the less you pay, so taking showers instead of baths, fixing dripping taps and using the washing machine less will all save you money.
Savings: £47 a year if you switch from water rates to a meter.
Insurance Do not automatically accept your household or motor insurance quotes. You can knock hundreds of pounds off by shopping around for the best premium.
Savings: According to Esure you can save £216 on average by switching motor insurers and £150 on household insurance: total saving £366.
TOTAL SAVINGS: £3,646
Catherine saves £400 at a switchCATHERINE White, a 25-year-old mother of two from Edinburgh, switched from Scottish Power to EDF Energy to save money.
She says: "I decided to switch as I was with Scottish Power and I was having a lot of problems with them for about six months.
"They had set my direct debit at the wrong level and I ended up with a massive bill."
Catherine used energyhelpline.com to find a cheaper supplier.
The site recommended EDF Energy and calculated that she would save more than £400 a year by switching to the company's dual fuel tariff.
She says: "I saved quite a lot of money by doing this and I'm also looking to make savings in other areas.
"I am with Virgin Media which is the cheapest (broadband supplier] in my area and I will shop around for things like car insurance in the future."
The full article contains 1172 words and appears in Scotland On Sunday newspaper.
