What are cashback websites? How much can you save?

Cashback websites are your first port of call when you want to start saving money on everything you buy. A typical user can make an average of between £280 and £330 a year, without really trying. With a more dedicated approach, some bargain-hunters report making £500 or more.

See also: Odd things you didn't know you could get cashback on

See also: 10 insider secrets to guarantee cheaper online bargains

If the world of cashback websites is fairly new to you, it pays to get to know what's on offer, and how you can take advantage.

The two most popular cashback sites are Topcashback and Quidco, and it's worth looking out for special freebie deals they tend to run for new members when you sign up.

After you have joined a site, whenever you buy anything - from groceries to furniture, and fashion to Christmas presents - instead of going straight to a retailer's website, you go into the cashback website (or through the app), and click on the link to the retailer.

You can continue shopping as normal with all the stores you usually shop at, and your transaction will be with the retailer themselves, but by going in through the cashback website, they have essentially 'referred' you.

The cashback website will be paid by the retailer for the referral, and they will pass some of that onto you, though cashback. This can be anything from 1% of everything you spend to 100% of it - and tends to average around 7%. The amount you get back will vary between cashback sites, retailers, and will change throughout the year as each site runs special offers.

The money comes back into your cashback account - which takes between seven and ten days, although, if the small print of a particular cashback deal is complicated, it can take longer.

Once the money is in your cashback account, you can transfer it to your bank account. Cashback websites have evolved, so you no longer have to build up a minimum payment, you can transfer it immediately. It's worth doing sooner rather than later, because the money in your cashback account is not protected by the Financial Services Compensation Scheme.

Make the most of it

Rather than always sticking with one site, it's best to sign up to a couple, as no one site is always better for cashback rates, so it's worth shopping around - especially on larger purchases.

It's also important to go into the sites every time you shop. You shouldn't let it stop you getting a better deal from a store that's not on any of the cashback sites, but you'd be surprised at the kinds of things you can get cashback on - and the kinds of rates some of the sites will pay.

One of the most rewarding approaches is to hunt for your next holiday on the sites. It's something we spend thousands of pounds on every year - so just getting back 1% of your spend would be a major boost to your spending money when you get there.

Likewise you can get cashback on your utility bills, insurances, and shopping everywhere from eBay to Argos and Iceland.

It's also worth checking for the 'free cashback' deals. So, for example, at the time of writing Autotrader is offering cashback of £2.50 if you opt for a free bike listing - so you get a free listing, and you make money at the same time. Likewise, Confused.com will offer you £2.30 for searching for an insurance quote, and EE will give you £5.25 if you get an EE free sim.