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Sterling UK money
Posted: 22nd May 2019

According to the latest research, the average* household spends around £250 to £300 per month on bills – this includes gas and electricity, water, broadband, a TV license and council tax. While these costs can’t always be avoided, you should try to keep on top of them to maximise your disposable income and keep costs down – there’s no point paying more than you need to!

Energy

Gas and electricity usually comes packaged together under a single tariff, although you can get either one separately with different providers if you choose. The cost varies hugely depending on your type and size of property, the number of occupants as well as the time of year.

Last year the government gave Ofgem powers to set price caps for consumers on standard variable rate tariffs following sustained criticism of the ‘big six’ energy suppliers. It may be worth changing supplier or examining some of the smaller energy providers that operate in the UK to keep costs low – as well as taking measures to reduce usage where possible such as ensuring your home is well insulated, turning off lights or showering instead of bathing, and so on.

For a long-term savings, you could consider installing photovoltaic solar panels on your roof – while the initial cost of the panels is around £5,000 for 21 square metres, solar panels could provide an annual saving of between £80 - £200 per year, or more if you have a large house or use a lot of electricity.

Water

The average water bill is about £30 - £40 per month, although again this depends on where you live and how much water you consume. You can choose to be on a meter, which means your water usage is recorded and you’ll be charged accordingly, or you can pay a flat rate for unlimited usage.

You should pick the best option for your usage – if you use a lot of water it’s probably a good idea to simply pay a flat rate, for example.

Broadband, TV and communications

Internet and telecoms have risen rapidly to become one of the most expensive monthly household expenses. Fortunately, there are things you can do to make your money go further without doing things ‘on the cheap’.

Let’s start with TV. All new televisions come with Freeview as standard, so gone are the days when you could buy a TV with only five channels programmed in. Some 17 million households in the UK pay extra for cable or satellite TV services with access to hundreds of channels – with many then paying a premium on top for extra films or sports channels. It’s important to question whether you actually need the additional channels, or indeed whether standard Freeview may be a better option.

Alternatively, you can use a streaming device or pay for a subscription on-demand TV service, which is typically £5 to £7 per month compared with £22 per month for a basic satellite package.

When it comes to internet, again this can often be packaged into joint TV/phone/internet packages which may appear to be at a reduced cost, but you should again consider whether you need all of the added extras or whether you’d be better off paying for just broadband.

Consider whether you really need the fastest internet speeds going – if you’re only using the web to browse or check email, then the chances are you probably don’t. If you watch a lot of TV and videos over the web or play games online, you’ll probably need more – use a comparison site to help you find the best price.

As for your mobile phone, some plans can be really expensive, especially if you select one that comes with one of the latest handsets or a lot of mobile data. And often, the total cost of those plans can be more than it would be to get a sim-only deal and buy the new handset outright!

Consider a sim-only plan and sticking with your old mobile for a few more years to save some cash going out of your account every month.

Council tax and TV license

In 2017 it was announced that the TV license fee would increase every year in line with inflation until 2022. A TV license is compulsory for most households that consume live TV or programmes using the BBC’s catch up service.

There are some exceptions to payment of the license fee – over 75s are exempted, for example. If you desperately don’t want to pay for a TV license, there are (legal!) ways around this, but it may severely restrict what TV you can watch.

Council tax is compulsory for all UK households and is set by each individual council and reviewed each year – most people in England saw a significant hike in their rates on 1 April. By law councils can increase the council tax they charge by up to 5.99% per year – if they want to increase by more, this must be subject to a local referendum. Council tax pays for all of your local services such as social care, road maintenance and bin collections, among other things.

If you’re out of the country for a long period of time you may be able to claim a council tax rebate when you return to your UK home.

While it does seem like costs are constantly on the rise, you can help to manage the cost of living by cutting back in other areas and continuing to be smart with your cash. If you’re struggling to make ends meet, take a look at our ‘how to beat the squeeze’ blog for some handy tips on how to better manage your money.


Figures correct as at May 2019

*3 bedrooms, 4 occupants - https://www.which.co.uk/news/2018/04/shrinking-homes-the-average-british-house-20-smaller-than-in-1970s/

Your home may be repossessed if you do not keep up repayments on your mortgage.