Tuesday 2 September 2008

A step-by-step guide to cutting all your bills

As the outlook for the current economic climate shows little sign of improving, increasingly hard-pressed households will be looking for ways to tighten the financial belt as incomes continue to be ravaged by mounting food, fuel, mortgage and motoring costs.

New findings from consumer body Which? show that 46 per cent of people plan to reduce spending in the coming year in the face of these increased demands on their finances, with half planning to cut back on non-essential items, such as clothes, DVDs or books – while many are holding off on buying big-ticket items.

At the same time, there are no signs of the current inflationary pressures easing over the short term, so it's time to look at ways of trimming your monthly expenditure on the basics, in order to balance the books.

The good news is, there are some simple bill-busting steps you can take to economise and offset rising household costs.

UTILITY BILLS

The price of utilities such as gas and electricity have rocketed of late, and many of us have seen our bills go through the roof. Almost every household across the UK has been hit by the soaring cost of oil, and felt the pinch as gas and electricity providers have put up their prices.

In the latest round of hikes, Scottish and Southern Energy (SSE) and Eon both increased their gas and electricity prices; SSE introduced hikes of 19.2 per cent on electricity and 29.2 per cent on gas, while Eon introduced increases of 26 per cent to its gas and 16 per cent to its electricity prices.

"These hikes are a hammer blow to households," says Scott Byrom from the price comparison service Moneysupermarket.com. "They show that the energy giants are reeling from the rapid spike in wholesale gas prices."

Given that things only look set to get worse, now is the time to take steps to keep a lid on your bills, and one of the simplest ways of cutting costs is by switching supplier.

If you have never switched before you could save nearly £300 by moving to a better deal elsewhere, according to price comparison service Confused.com – although the amount will vary according to your supplier and tariff, and the size of your bill. The whole process is very straightforward, and most of the legwork – and paperwork – is done for you.

Consider switching to an online tariff, which tends to be cheaper than a standard tariff, and opt to pay by monthly direct debit, as providers tend to reward customers who do this with a discount. You may be able to make savings by buying your gas and electricity from the same provider – known as a "dual fuel" plan; these deals typically include discounts or reduced prices.


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