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Money leaks cost Brits £12.2bn

14 May 2014

Gocompare.com reveals the Nation’s top twenty money wasters and how to plug them

Brits estimate that on average they waste £30 a month, letting their money drip away in underutilised subscriptions, avoidable fees and overpayments.  In total, these so-called ‘money leaks’ are costing the nation £12.2 billion a year in avoidable overspends.

Unused discount vouchers head the table of the Nation’s biggest money leaks according to the survey commissioned by leading price comparison website Gocompare.com.  Underutilised TV subscriptions, avoidable bank and credit card charges and overspending on convenience food and drink also featured in the top 20 money wasters:

Rank

The UK’s Top 20 Money Leaks

%

1

Unused discount vouchers

18

2

Underutilised cable TV/additional TV channel subscription

16

3

Cigarettes/tobacco

16

4

Buying too many take-away meals

16

5

Paying avoidable bank charge or overdraft fees

13

6

Spending too much at the pub or night club

12

7

Paying avoidable interest on a credit card

12

8

Buying too many ready-meals

11

9

Being on the wrong mobile phone tariff

10

10

Buying take-away coffee

10

11

Unredeemed loyalty card benefits

10

12

Credit built up on gas/electricity/phone bill paid by direct debt

9

13

Unredeemed gift vouchers or experience days

8

14

Failing to shop around for home insurance

7

15

Paying fees at cash machines to withdraw cash

6

16

Paying avoidable credit card annual fees

5

17

Direct debits which should be cancelled

5

18

Failing to shop around for car insurance

5

19

Underutilised gym membership

5

20

A direct debit charity donation you’ve been meaning to cancel

5



Claire Peate, customer insight manager at Gocompare.com, commented: “Many of the top money leaks identified in our survey relate to relatively low value items like take-away meals and drinks or unused discount vouchers.  While day-to-day we might not miss the odd £5 spent on a mid-morning cappuccino and muffin - bought regularly over the course of a year these small money leaks can quickly add up to a sizeable sum.

“People participating in our survey estimated that on average they waste £30 a month – which adds up to £360 a year - which goes to prove that the old idiom: ‘look after the pennies and the pounds will look after themselves’ still rings true.”

Claire Peate continued, “Avoidable bank and credit charges also featured several times in the top 20 wastes of money.  However, a little forethought can help you avoid unnecessary fees.  For example, banks charge for unauthorised overdrafts, so agree a pre-arranged over-draft limit with your bank - even if you don’t think you’ll need to use it on a regular basis.  And, before using a cash machine to withdraw money, check whether it will charge you for the transaction.  ATMs situated in shops, pubs and petrol stations tend to be the worst offenders for charging you to withdraw your own money.

“Over time, missing credit card payments or just repaying the minimum amount can be a costly drain on your finances. Typically, credit card providers charge £12 for missed payments and will add interest to your outstanding balance and the longer you take to repay your debt, the more money you will owe as the interest accumulates.

“Subscriptions and bills paid by direct debit account for a large number of money leaks in terms of overpaid utility bills or unused services or memberships.  To help plug these leaks, get into the habit of regularly reviewing your bank statements and bills to check for overpayments and for DD payments which are being made for things you no longer want – which you will need to cancel.  Also reviewing your car and home insurance and utility tariffs on a regular basis can be financially rewarding and can plugs some significant leaks in your outgoings.

For more information on money matters visit http://www.gocompare.com/covered/your-money/.

-ends-

Notes to editors:

On 10th April 2014, Gocompare.com commissioned an online survey among 2,000 randomly selected British adults who are Springboard UK panellists.  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.

For the £12.2bn figure: from the survey, 71% of those sampled said that they were wasting money on one or more of the top 20 money leaks.  The average figure per month that people felt they could save by plugging their ‘money leaks’ was £30. Therefore 71% of the UK adult population (47.8m according to Experian’s Demographic Summary) =  33.9m.  £30 a month is £360 a year therefore £360 x 33.9m = £12,204,000,000.