The 10 biggest money wasters and how to solve them.
Overpaid utility bills top the table of the nation's biggest "money leaks" according to a new study released today. Paying ATM fees to withdraw cash, avoidable credit card interest and charges, club memberships and TV channel subscriptions also feature in the list of the top 10 money wasters that leach funds from Brit's bank accounts.
The research commissioned by Gocompare.com found that most of the top money wasters are linked to our tendency to set-up and forget financial arrangements, or by things we just don't get round to like shopping around for a better deal or cancelling an unwanted subscription.
The UK's Top 10 Money Leaks
Credit built up on gas and/or electricity bill paid by direct debits
Credit built up on telephone bill paid by direct debits
Paying fees at cash machines to withdraw cash
Could save money by switching mobile phone tariff and/operator
Paying avoidable interest or annual charge on a credit card
Paying avoidable bank charge or overdraft fees
Failing to shop around for car insurance
Direct debits which should be cancelled
Underutilised cable TV/additional TV channel subscription
Underutilised club membership
Claire Peate, customer insight manager from Gocompare.com, commented: "Most of us have small money leaks in our finances, which if left unattended can quickly add-up over the course of a year. A big area of waste occurs when bills or subscriptions are paid automatically by direct debits, allowing us to set it up and forget it. While direct debits are a convenient way to settle bills, if not regularly reviewed and managed they can lead to some accounts, such as utility bills, being overpaid while smaller payments for things like unwanted club memberships can be easily overlooked.
"If you pay your gas or electricity by direct debits, you can check whether the level has been set too high by checking your meter reading against your bill. If your account is in surplus after your bigger winter bills you should ask for the overpayment to be refunded to your account."
Claire Peate continued: "Our survey also revealed that many people waste money by paying easily avoidable bank and credit card fees or by not taking the time to review their finances. Just under a quarter surveyed said they have paid ATM fees for withdrawing their own cash, but a little forward planning can help you avoid having to fork out these unnecessary charges. Check which ATMs your bank allows you to use for free and beware of cash machines in shops, pubs and petrol stations as these often charge for withdrawals. Also, banks charge customers who go into the red without permission, so it is sensible to pre-arrange an overdraft limit with your bank, even if you don't think you'll need it on a regular basis.
"Credit card holders should avoid missing payments or just making minimum repayments. Typically companies charge around £12 for missed payments and add interest to any outstanding balance, so the longer you take to repay the debt, the more you will owe. Also, the additional changes on credit card cash withdrawals make this an expensive way to borrow money.
"A regular spring clean of your finances to make sure that you are getting the best deals on your insurances, energy and other bills can plug significant leaks in your finances. Customers who switch their car insurance with Gocompare.com could save £252.65*, while switching gas and electricity supplier could save you up to £449.19 a year**."
Notes to editors:
*Based on online independent research by Consumer Intelligence during 01 April to 30 April 2013. 50% of consumers could save up to £252.65 on their car insurance with Gocompare.com.
**Based on customers who switched energy suppliers for both gas and electricity (dual fuel) using the Energylinx-powered Gocompare.com platforms during the 01 January - 31st March 2013. At least 10% of people who switched energy supplier for both gas and electricity with Gocompare.com saved £449.19 or more
The top 10 list was compiled from research conducted on the 19th-20th March 2013 by Vision Critical. Through an online survey among 2,011 randomly selected British adults who are Springboard UK panelists. The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.