Energy companies keep £1.2 billion of our savings

Gas hob burning moneyMore than half of energy customers are overpaying their gas and electricity bills, allowing the energy providers to benefit from an extra £1.2 billion each year.

Per customer this works out as an average overpayment of £80 every year.
But while the energy companies are holding onto this extra cash, customers are being robbed of the interest the money could make if it was in a standard savings account.

Energy bills

Every year 53% of us are paying more than we need to towards our energy bills, according to research*.

As we use less energy in the summer, when paying by direct debit, a surplus is built up which can then be used to cover more expensive winter bills.

But after winter many people still remain in credit to their supplier, giving it free access to this extra money.

Paying by direct debit

Paying by direct debit is a cheaper way of paying for your bills. 62% of people pay their gas bills by direct debit while 70% pay electricity bills this way.

However, as utility companies estimate bills for a household, this can be overestimated leading to customers overpaying their bills.

To avoid this, instead of blindly paying the direct debits, customers should regularly take their own meter readings. If you find your account is in credit to your supplier, you can ask for this money back.

Savings accounts

If this extra cash was put into a savings account it would at least start earning some interest. As you may need the money within a year, to cover higher payments, an instant-access account would work best in this situation.

The rates on instant access accounts are pretty poor at the moment and generally lie around the 2.5%, but it's still better than nothing and you've got access to the cash when you need it.

Confusing bills

Energy companies have been slated in the past for making their billing systems more complicated then they need to, as we highlighted in The best and worst energy bills.

If it was easier to understand what energy companies were charging, customers could see more clearly if they were paying more than they should.

Switching suppliers, if you can, will almost always save you money and it's also a good way to avoid impending energy hikes. Our guide gives you a step-by-step guide to the switching process and you can compare energy costs across the market in our on our quote engine.

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Energy companies keep £1.2 billion of our savings

Using a mobile phone to make and receive calls, send texts and browse the web while abroad can be extremely costly – especially if you are travelling outside the European Union (EU), where calls can cost up to 10 times as much as at home.

To avoid high charges, Carphone Warehouse suggests tourists ensure a data cap is in place, use applications to check data usage, turn off 'data roaming', avoid data-intensive applications such as Google Maps and YouTube and use wi-fi spots to update social networking sites.

Payment Protection Insurance (PPI) is supposed to help people to continue meeting their loan, mortgage or credit card repayments if they fall ill or lose their jobs. However, policies are often over-priced, riddled with exclusions and sold to people who could not make a claim if they needed to.

At one point, sale of this cover - which was often included automatically in loan repayments - was estimated to boost the banks' profits by up to £5 billion a year.
Now, though, consumers who were mis-sold PPI can fight back by complaining to the bank or lender concerned and taking their case to the Financial Ombudsman Service (08000 234567) should the response prove unsatisfactory.

It could be you, but let's face it, it probably won't be. In fact, buying a ticket for the Lotto only gives you a 1 in 13.9 million chance of winning the jackpot.

With odds like that, you would almost certainly be better off hanging on to your cash and saving it in a high-interest account.

No-frills airlines such as EasyJet may promote rock-bottom prices on their websites. But the overall fare you pay can be surprisingly high once extras such as luggage and credit card payment fees have been added - a process known as drip pricing.

Taking one piece of hold baggage on a return EasyJet flight, for example, adds close to £20 to the cost of your flight, while paying by credit card increases the price by a further £10.
It may therefore be worth comparing the total cost with that of a flight with a standard airline such as British Airways.

Cash advances, which include cash withdrawals, are generally charged at a much higher rate of interest than standard purchases.

While the average credit card interest rate is around 17%, a typical cash withdrawal of £500, for example, is charged at more than 26%.
What's more, as the interest accrues from the date of the transaction, rather than the next payment date, costs will mount up even if you clear your balance in full with your next payment.

Supermarkets such as Tesco and Asda often run promotions under which you can, for example, get three products for the price of two.

However, it is only worth taking advantage of these deals if you will actually use the products. Otherwise, you are simply buying for the sake of it, which is a waste of your hard-earned cash.
To avoid paying over the odds, it is also worth checking the price per kilo to ensure that larger 'economy' packs really are cheaper than the smaller versions.

Buy a train ticket at the station on the day of travel and the price is likely to give you a shock - especially if you are travelling a long distance at a busy time of day.

However, you can cut the cost of train travel by 50% or more by going online and making the purchase beforehand - especially if you book 12 weeks in advance, which is when the cheapest tickets are on sale.
Other ways to reduce the price you pay include avoiding peak times and taking advantage of so-called carnet tickets, which allow you to buy, for example, 12 journeys for the price of 10.

Most High Street banks offer packaged accounts that come with monthly fees ranging from £6.50 up to as much as £40, with a typical account charging about £15 per month.

Various benefits, such as travel insurance and mobile phone insurance, are offered in return for this fee. But whether or not it is worth paying for them depends on your individual circumstances.
Before signing up, it is therefore essential to check that you will make use of enough of the benefits, and that you cannot get them for less elsewhere.

Overseas money transfers or travel money purchases attract the same high rate of interest as credit card cash withdrawals.

Worse still, most credit cards – and debit cards – also charge you a foreign loading fee if you use them to make purchases while abroad.
You can, however, avoid these charges by using a Saga Platinum or Nationwide Building Society credit card.

Numbers starting 0871 cost 10p or more from a landline, while those starting 09 can cost more than £1 a minute from a mobile phone.

And the operators of these high-cost phone lines, some of which are banks, often get a cut of the call charges.
Most 09 numbers are linked to scams and should therefore be avoided at all costs, while 0871 numbers can often be bypassed by searching for an alternative local rate numbers on the

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