17th November 2014
British households are increasingly underestimating their main bills by an average of £770 according to research from Santander.
When it comes to predicting what council tax, gas, water and electricity will cost, the bank’s analysis found that the gap is 65% or £303 greater than last year, when the average amount households underestimated their bills by stood at £467.
Santander asked bill payers to estimate their annual spend on their main household bills and found that respondents underestimated the amount they pay for council tax by £721 per year. Bill payers were also shown to underestimate gas, by £279, and electricity by £91 but at the same time they over-estimate their expenditure on TV/phone/broadband bills, by an average of £386.
|Utility||Estimated spend 2014||Actual spend 2014||Under/over-estimation 2014||Under/over-estimation 2013|
|Council tax||£747||£1,468||£721 under||£672 under|
|Gas||£463||£742||£279 under||£243 under|
|Electricity||£518||£609||£91 under||£72 under|
|Water||£328||£393||£65 under||£146 over|
|TV/phone/broadband||£503||£117||£386 over||£374 over|
|Totals||£2,559||£3,329||£770 under||£467 under|
*Source: Santander, 2014
More than a quarter of bill payers admitted they do not read their statements thoroughly, while 4% – equivalent to 1,000,000 UK households do not even open statements.
The survey found that 13% have never supplied a meter reading or could not remember the last time they gave one for either their gas and/or electricity. On average, the last time bill payers reviewed their providers for a better offer was more than a year ago which means households could potentially be missing out on hundreds of pounds worth of savings as a result of these factors.
Matt Hall, head of banking at Santander, said: “Increases in household bills have added to the cost of living in recent years and it’s more important than ever that people check their bills thoroughly. Some can be tricky to understand, so it’s important that households keep an eye on statements and call their supplier if anything is unclear.
“Bill payers should regularly review their supplier to make sure they’re getting a good deal but should also consider the most cost effective way of making payments. Many suppliers offer a discount for paying by direct debit for instance.”
David Mann, head of money at comparison site uSwitch.com, added: “Consumers are in a lose-lose situation with everything shooting up except for their income. It’s time to start paying serious attention to managing household bills. By cutting the amount you spend on the essentials, you’ll have more money to spend on the non-essentials, which is welcome news at this time of year.”