After a year of turmoil, the Government are finally taking some action about rising energy bills. For many though, the announcement has come too late – and the cost-of-living crisis has already led people to take a long hard look at their finances.
Many of the people I speak to find this whole process overwhelming. So for the column this week, I’ve put together a quick guide on how to save money for your main monthly bills.
Finally, some good news (of sorts) as plans are finally announced for the average energy bill to be fixed at £xxx. However, that’s still far higher than the cost of energy last year – and the cap is only due to last until [date].
But we do at last have some clarity, which means you might be able to fix your bill for the year ahead at a better rate. However, don’t rush in to fixing as there are lots of factors to consider, as I highlighted in my column two weeks ago.
If you can’t afford your bills even with the new price cap, don’t forget there are a range of grants and support that you can seek – and if your say you’re in financial difficulties the business should offer you a plan tailored to your needs to help you out of the situation. All the information you need is on regulator Ofgem’s website here
The Bank of England interest rate has gone up to 1.75%, which is nowhere near the actual level of inflation of 10.1% in July. Some future forecasts are terrifying, with some analysts predicting inflation hitting 18%. The announcement about energy bills being capped should reduce that. But this still means that the cost of borrowing money will be more expensive – as will loans, credit cards and mortgages. Focus your energies on paying off existing debts to reduce your outgoings. If your credit card goes up, close the account and ask to pay off the debt like a loan instead.
Broadband, mobiles and streaming
Most broadband contracts have clauses allowing the businesses to increase interest rates above the rate of inflation. This might come as a shock to people on fixed term deals with a way to go before the end of their contracts. If you’ve come to the end of your broadband deal (and millions of us have) you are probably overpaying. You could halve your bill to £40 or £50 a month just by switching providers. If you’re mid-contract and in financial difficulties, the firm should now be following new rules where they waive expensive exit fees.
Insurance and subscriptions
Every year, you have a window of opportunity to change insurance companies because they must give you four weeks’ notice that your current policy is due to expire. But rather than wait for the letter, check with the insurance company and pop the date in your diary a month earlier so you’ve got time to shop around and save.
I’ve written a lot lately about saving money by cancelling subscriptions lurking on your account (see last week’s column). In short, go through your accounts and cancel anything you don’t need through your bank or card provider – and claim back anything you haven’t authorised.
Things you are stuck with
You can’t get out of your council tax or water bill, even though both are likely to rise in April 2023. There are council tax discounts for a range of situations, including living alone, being a student or carer or being in the armed forces. People on benefits or who may be more vulnerable also get discounts. You may even be able to claim retrospectively if you’ve not done so in the past.
Water bills are a bit trickier, but you are entitled to compensation for delays fixing problems. And water companies have a range of free options on their websites to help you save money and reduce your bills, which is especially useful if you live in an area with drought restrictions.
Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.