Sunday, April 15, 2012

Groan comforts: How to cut the cost of home bills - Mirror.co.uk

The cost of owning and running a home is now at its highest level for four years.

According to Halifax, the average ­annual cost now stands at £9,393. That's £3,000 more than a decade ago, when it was £6,061, and the highest since 2008.

As our table shows, this figure includes mortgage costs, gas and electricity and household insurances. Here, we take a look at the various ways you can slash some of the biggest expenses, as well as ways you can make your home pay...

 

Cut mortgage payments

Even though mortgages are the only cost to have actually fallen over the past four years, for most people it is still the biggest outgoing every month – and it's rising.

Around one million customers will be affected by increases to standard variable rates. Overall, the average increase is 0.62 per cent which will add an extra £52.58 to a £150,000 mortgage or £630.96 over the year. That's why it's vital to make sure you aren't paying more than you need to.

David Hollingworth, of mortgage brokers London & Country, said: "A borrower with a £150,000 repayment mortgage over 25 years on Co-Op's soon-to-be standard variable rate of 4.74 per cent would be paying £854.31 a month.

"The same mortgage on HSBC's lifetime tracker at 2.19 per cent above the current 0.50 per cent base rate, and carrying no fee, would cost £687.37 a month, saving £167 per month – or £2,000 a year."

Household insurance

Only one in four consumers has switched home insurance provider in the last year, which means around 19 million households could be paying too much.

You should never just accept the ­renewal quote offered to you by your insurer without shopping around. According to Gocompare.com, those who switch their buildings and contents policies save, on average, £125.33.

Energy bills

Almost 4 million households are in debt to their energy supplier, according to comparison site uSwitch.com. Its annual study shows that indebted consumers now owe £131 on average – 4 per cent more than last year.

Shopping around to ensure you are on the correct tariff for your usage and region is crucial. Moving online to a "dual fuel" direct debit deal is the easiest way to make savings. According to MoneySupermarket.com, by switching to the best online tariff, First Utility's iSave v10 tariff, as opposed to the average standard quarterly cash and cheque tariff which costs £1,251, customers could save £224 over 12 months.

Get creative

Think of ways your home can work for you. If you have a spare room, consider letting it out. Under the Government's Rent a Room relief, you can bring in up to £4,250 a year tax-free. Or hire out your driveway at ParkatmyHouse.com

Lorna Beaumont from Daventry, Northamptonshire who saved £181 over the year, just by switching their household insurance provider
Savings: Lorna Beaumont who saved £181 over the year just by switching her household insurance provider

Roland Leon

 

Case study

Lorna and Jason Beaumont saved nearly £200 on their annual housing costs just by switching their home insurance to another provider.

Lorna, 42, a hairdresser, admits the couple didn't shop around for the best deals until a couple of years ago. She says: "We really started to notice living costs going up, so now we ­definitely keep a close eye on everything going out."

The couple, who have a daughter Georgia, 19, were paying £35.08 a month for their home insurance, but have just moved to Nationwide Building Society and are now paying £19.95 a month.

Lorna says: "I was in my local branch of ­Nationwide and saw there was an offer for Flexaccount customers which entitled them to 135 days' worth of free cover so it made sense to move our home insurance to them. I find I'm always on the ­lookout for good deals and it ­really can make a difference if you just make a few simple changes."

Lorna and Jason, who works in the construction industry, also keep a check on their other ­outgoings. Lorna says: "We're locked into a fixed mortgage rate now, but will definitely review this when it ends. And we always look for the best deals on our utility bills."

Pound notes

£ The majority of couples choose not to adopt a "what's yours is mine" ethos when it comes to money. ­Website MyVoucherCodes.co.uk found that 29 per cent of those who took a "what's mine is mine" approach to their money matters said it was because they earned more than their partner and it was fair they kept their share, and 42 per cent said it was due to the tough economic climate, making them more protective over their own money.

£ Teachers are the best ­savers, according to the Co-operative Bank. They save on average £2,125 each year, higher than those working in finance and more than four times those in artistic and sport-related jobs. People working in entertainment and design have had to adjust their lifestyles the most to cope with current pressures.

£THE US and Canada are the most expensive places to have a ski or snowboard ­accident, according to ­Sainsbury's Travel Insurance. The ­average cost of winter sports-­related travel claims was £2,863.

£ Around 22 million adults have people – children or parents – who are financially ­dependent on them for ­everyday costs, including food and ­housing, with the ­average salary supporting two people. Insurers LV= found 29 per cent of adults with never ­expect to become ­dependent-free, and those that do expect to wait ­until they are 51 on average.

£ Men pay far more for their life insurance than women, says comparison site Confused.com. Men are paying an average of 26 per cent more per policy, yet one in four men never shop around for a better deal.

£ Saffron Building Society has launched a 12-month fixed-rate regular saver cash ISA, paying four per cent annual tax-free interest. The account is available by post or through one of Saffron's branches until April 30.

The Money Map's financial expert Steve Hodder reveals how to save for your children's education and tips to reduce inheritance tax

Q How can I ensure that my children can afford to educate themselves in the same way I did now the costs have increased?

A It is becoming increasingly difficult to do this. However, putting a little aside each month while your children are young will help to make this more affordable. You could use your personal ISA allowance, which would keep you in control and allow you to take the money back if your children do not elect to take this route.

Q I am looking to ­remortgage in order to save money, but there are so many mortgages available – how do I know which is best?

A This is difficult as you need to find the mortgages that are available for your circumstances, then find the best rates – not forgetting to add in any fees that will not be represented on the headline rate. Email enquiries@themoneymap.co.uk and they will send you a questionnaire. Return this and they will ­provide you with the most suitable mortgages for your situation.

Q I am considering ­taking steps to ­reduce the inheritance tax charge on my estate – what are my main options?

A You can spend it or make gifts. Utilise IHT friendly trusts or insure yourself for the tax liability. Usually a combination of all of these options would be advisable.

No comments:

Post a Comment