25th January 2016
With many households across the country feeling the squeeze ahead of January pay day, new research from Santander shows that bill payers actually underestimated their main expenses by an average of £1,459 last year.
Across the UK as a whole, this adds up to the equivalent of almost £39bn.
The bank’s findings highlighted whilst households estimate their annual household bill costs to be £2,528, in reality, they spent an average of £3,987.
Of all the bills, TV, phone and broadband outgoings were the most significantly underestimated with households estimating annual spend to be 53% lower than actual costs.
The study also showed that many households are struggling to cover the cost of their household bills.
In addition, some 34% said they can only just make ends meet, one in four, at 25%, admit to borrowing money or raiding their savings in order to pay their bills and 6% claim they often do not have enough or never have enough to pay their bills.
Matt Hall, director of banking at Santander, said: “It can be difficult to keep track of bills and price changes. In winter months, when bills may rise, it’s even more important to make your money go further.
“At a time when many households are reviewing their annual expenditure and trying to cut costs, it’s worth remembering that it’s often cheaper to pay your household bills by direct debit.”
Santander’s analysis however also suggested that households are taking proactive steps to monitor energy consumption and reduce costs, as 12% have a smart meter or plan to install one.
One reason why estimated and actual bill spend differs may be a lack of attention to bill statements. Almost a third, at 30%, of bill payers admit they do not read their statements thoroughly, while 5% do not even open their statements.