Households will have to fork out an extra £150 for essential bills this year as a spate of tax and price hikes are introduced.
As of this week, households will be hit with price hikes from BT, BBC and the Royal Mail among others, while the government has implemented a 2p fuel tax increase.
As most of these hikes affect ‘must pay’ bills like TV licences and NHS healthcare, we can’t simply switch to a cheaper brand or reduce our consumption.
That means the best way to minimise the strain on our recession-hit budgets is to set about cutting the cost of all other monthly outlays instead. Here are 10 simple ways to achieve this.
1: Remortgage for a better deal
This area has the biggest potential for savings so it comes top of any moneysaving list.
Mortgage rates have been tumbling after six consecutive cuts to the base rate, and there are a number of attractive deals on offer.
But there are two things to keep in mind: First, the best rates are limited to those who already own at least 25% of their home.
Second is the fact that the window for brilliant tracker mortgage deals is now gone. Had you locked into a tracker before the base rate cuts, you would have shaved hundreds off your monthly repayments.
But with the base rate at 0.5% and the average tracker at over 3.6%, they now look markedly less attractive – and of course there’s no telling how high they could rise in coming years.
Conversely, fixed rate deals look well priced. Respected mortgage analyst Melanie Bien of Savills Private Finance believes the UK is near the bottom of the fixed-rate mortgage market, and homeowners looking for security would be wise to seek longer-term home loans as soon as possible.
Contact a mortgage broker to see what deals are available to you.
2: Surf your way to savings
Another great tip is to take advantage of online discounts – especially on your financial products.
Insurers often prefer selling their cover this way as it means lower overheads for them, and some of this saving is passed on to the customers. For example, you can reduce your insurance premiums by as much as 25% by taking advantage of online discounts.
You can reduce your premiums further still by paying for your policy annually rather than monthly. If you don't have enough money to do this, you could put it on a new purchase credit card and pay it off gradually.
3: Green isn’t always best
Minimising your carbon footprint is an important aim, but make sure it doesn’t leave you out of pocket in the process.
Though popular, many green financial products – including mortgages, electricity, and insurance - are significantly more expensive than the more established market brands.
Sometimes this price discrepancy is down to the fact that green products are simply more expensive to bring to market, but often it is the result of businesses hijacking a worthy cause in order to boost their profit margins.
After all, a company won’t undertake any initiative unless it makes them money. You may be better off buying the cheapest to market product, and donating a portion of the difference to an eco-friendly cause.
4: Make use of discount vouchers
As the economic turmoil deepens, we have seen a surge in the popularity of discount vouchers by people from all walks of life, and it's not hard to see why – with budgets being stretched to the limit, the opportunity to save as much as 50% on purchases is extremely appealing.
Whether it's a “buy one meal get one free” deal at Zizzi's or 25% off at Hamley's, there are literally hundreds of discounts to choose from.
Sign up to sites like www.myvouchercodes.co.uk and you can get updates on the month's most popular offers.
Of course the golden rule with “discount” shopping is that it’s only a good idea if you’re buying goods you had to buy anyway – there’s little point in saving 20% if you spend 30% more in the process.
5: Use credit cards to your advantage
Credit cards can prove a great moneysaving tool, regardless of your financial position.
For those in the red, 0% balance transfer and new purchase credit cards are a great way to repay debt cheaply. As an illustration, a person with the average outstanding credit card debt of £3,256 will save £443 simply by shifting debt to an interest free card.
For those in the black, you can use reward credit cards to make your money go further. Whether its petrol discounts, free Airmiles or just plain cash back you want, there are a number of good deals out there out there.
Just remember the two golden rules of reward cards: Always pay your debt off in full each month (otherwise the sky high interest rates will come back to bite you) and only ever use it for things you planned to purchase anyway.
6: Switch energy suppliers
If you're looking to cut your energy bills, switching energy suppliers is a good place to start.
Not only will it save you money, but it'll also send a clear message to your supplier that you aren’t willing to put up with their prices.
Unfortunately, with suppliers changing their tariffs so often, this does not always result in a long term saving.
To achieve this you need to choose a supplier’s online tariff and pay by direct debit. Studies show this can shave as much as 20% off your bills.
7: Switch broadband regularly
Broadband deals are getting cheaper all the time. That means if you signed up to a contract a couple of years ago and haven't changed since, you could be paying up to three times more than necessary.
So make sure you switch suppliers whenever your existing deal expires – as always, taking time to compare the different deals on the market.
As a final point, make sure you take the time to read the contract carefully. Research found that one in four broadband users are hit with unexpected charges of £36 a year because they didn't understand the terms and conditions.
8: Let your groceries come to you
You can make significant savings on your grocery bill by shopping a little smarter, or more specifically, avoiding the shops altogether.
Online shopping is especially handy for impulsive buyers or those with young children who expect you to purchase everything in the store.
It also helps you save money on transport to and from the shops, plus you avoid the general mayhem that comes with giant supermarkets.
You can cut bills further by opting for no name brand goods. The quality is essentially same, but the price most definitely isn’t. This is especially true for goods like salt, sugar, bottled water etc.
9: Switch current accounts
If you’re a High Street bank customer, there’s a good chance you’re stuck with an atrocious current account. Not only do most offer almost zero interest on credit, they come with sky high overdraft rates as well.
So which is the best bank account for you? Well that depends on your financial situation. Take a look at our best buy low overdraft or high credit interest accounts and get your money working for you, and not your bank.
10: Use VOIP for heavy phone usage
If you are constantly on the phone (or more specifically, your teenage child is) then you could save a lot by switching to Voice over Internet Protocol (VoIP), also known as Internet telephony.
The bottom line is that the more you use your phone, the more likely you are to save. If you do like the sound of VoIP, but simply can’t be bothered signing up with anyone, there are companies such as TeleDiscount that use VoIP technology from your normal landline to make cheap mobile and international calls.
All you do is dial an access code before the number you want and you’re good to go. No contract and no obligation. The call rates are far lower than you would normally pay on a landline, but not quite as competitive as the offerings from the likes of Vonage and Skype.
