Families 'underestimating bills'

%VIRTUAL-SkimlinksPromo%Gas bill and gas ringFamilies have underestimated the cost of their main household bills in the last year including council tax, gas and electricity by nearly £500 typically, research has suggested.

More than 2,000 bill payers were asked by Santander Current Accounts to estimate their annual spend on their main household bills over the previous 12 months and it then compared the results with actual spending costs taken from figures provided by bodies such as Ofcom, Ofwat and Ofgem.
The research found that households under-estimated their bill spending, made up of council tax, gas, electricity, water, television, phone and broadband costs, by around £467 over the course of a year.

Bill payers typically under-estimated how much they spent on council tax by £672 and the actual bill was almost double their estimate, at £1,444 on average. A t the other end of the scale they over-estimated their yearly TV, phone and broadband costs by £374 on average.

They also significantly under-estimated their spending on gas and electricity. Gas bills were under-estimated by £243 and electricity costs were put at £72 lower than the actual spend.

More than one quarter (26%) of those surveyed admit they do not read their statements properly, while one in 33 people (3%) said they do not open their statements at all. The number of people not opening their statements would equate to 800,000 households if the figures were projected across the UK.

One in nine (11%) householders said they were unable to afford their bills and n early half (44%) of those surveyed said they were "only just" able to cover them.

When asked how they budget for bills, two-fifths (41%) of people said they do not do this, while one third (33%) of people said they set money aside each month based on their own estimate of their bills. O ne in seven (15%) said they had a separate bank account set up specifically to deal with their bills.

The research comes at a time when household budgets are coming under fresh pressure as temperatures drop from a string of bill hikes recently announced by energy companies.

While nearly one quarter (23%) of consumers said they had never supplied a meter reading or could not remember the last time they gave one for their gas or electricity, nearly half (46%) have had a dispute with their supplier in the past, with the most common reason being that they felt they had been incorrectly charged.

Matt Hall, director of banking at Santander, said: "Household bills have risen significantly in recent years. With many people's income not growing as fast, many families are struggling.

"While almost all households are making efforts to manage their energy consumption, people could manage their household bills more efficiently by providing their supplier with regular meter readings and checking statements thoroughly."

Some 95% of those surveyed said they take steps to try to reduce their consumption and therefore their costs, with four-fifths (79%) of people saying they turn off the lights and seven in 10 (68%) saying they try to use less heating. Three-fifths (59%) of people said they turn electrical appliances off rather than leaving them on standby.

Mr Hall said people should consider finding cost-effective ways to make payments, such as using a direct debit. Suppliers will often offer a discount for this payment method.

Here are the amounts that bill payers typically over or under-estimated their bills by, with the estimated spend followed by the actual spend and the over- or under-estimation:
  • Council tax, £772, £1,444, £672 under
  • Gas, £512, £755, £243 under
  • Electricity, £528, £600, £72 under
  • Water, £332, £186, £146 over
  • TV/phone/broadband, £488, £114, £374 over
  • Total: £2,632, £3,099, £467 under

© 2013 Press Association
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