Household bills are a regular part of life, whether you’re a renter or a homeowner. From the moment you move into your first share, right through every home you own, you can rely on the same expenses to pop up like clockwork. Some can vary from month to month, others are the same every time. As our 2017 Cost of Running a Home Report discovered, 28% of homeowners in the UK spent more on household bills every month than they do on their mortgage. The average three-bedroom household with a single earner spends 83% of their annual income on bills and mortgage, leaving only 17% of their income as disposable. This highlights the importance of staying on top of your household bills as part of your monthly budget and measuring them against average household bills for your region to make sure you’re not overpaying.
Most gas and electricity providers will offer you several payment options. You can choose to pay quarterly, monthly or annually. Paying quarterly or annually means you will be sent a statement for the exact amount of gas and electricity you’ve used – provided you’ve been supplying them with accurate meter readings – at the end of each period and then be billed for that amount.
Monthly direct debits can be a good way of avoiding paying a large sum every quarter or year as your energy provider will work out an estimate of what you’re likely to use over 12 months and then spread that amount across 12 monthly direct debits. If your usage proves to be more or less than anticipated, then the direct debit amount will be calculated to try and avoid any surplus or shortfall in your account. If you end up in credit, some energy providers will offer an interest rate on the amount while it sits in your account.
Smart meters are an excellent way of staying on top of your energy usage as they help you to see how much gas and electricity you’re using each day, in money terms as well as energy units. This can then help you to realise where you’re using electricity and gas unnecessarily. According to Ofgem, the average UK household bill on gas and electricity is £1,345 a year, but these amounts can fluctuate wildly depending on the size of your house and region.
With many utility firms raising their prices, opting for fixed price tariffs can help to combat price hikes, as will shopping around when your fixed period is coming to an end. It’s also worth considering dual fuel tariffs – rather than having separate providers for gas and electricity – as these come with a discount, while online only accounts also generally offer a discount over receiving bills and statements via post.
According to Water.org.uk, the average UK water and sewerage bill is around £33 a month or £395 a year. Water rates vary greatly across the country, depending on the size of your locality and the availability of water in your area. Water companies bill for water in two different ways. The first is unmetered and calculates a set rate that is decided upon by your home’s ‘rateable value’ – a value that decides how much your rates should be based on your home’s size and location, along with other factors. The second method is metered, whereby you are billed for the amount of water you use. If your water bill is unmetered and you feel the bills are too high, you can ask your supplier to change to a metered bill.
The Office for National Statistics’ 2016 cost of living survey found that, on average, people in the UK spend twice as much a year on phone, broadband and TV than they thought they did. This can be attributed to expensive packages for premium channels and super-fast broadband deals, especially ones that offer excellent introductory rates but go up steeply after an initial period. If you’re trying to find out how to save money on household bills, this could be an excellent place to start. Check through your TV package and see what channels you watch regularly to decide if you need to be paying extra for them, especially sports and movie channels. Also look at your broadband speed; use a speed checker to see what your maximum speed really is. If it’s much lower than advertised, then it could be that your area isn’t capable of the higher speeds and it might be more cost effective to change to a less expensive package. Be wary before changing to a different phone, TV or broadband provider as you could still be in contract and could incur a penalty for moving before the other contract ends.
Council tax can differ greatly, from house to house and even from one street to the next. Houses are classed into different bands by the local authority and council tax is charged according to these bands. The 2017/2018 average tax in England for band D homes is almost £1,600, a rise of £60 on the previous year. Council tax varies greatly depending on your local authority. Even within London alone, council tax varies between just over £400 in Westminster to just under £1,500 in Kingston-upon-Thames.