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How to reduce your monthly expenses
- AuthorRichard Eastwood
Many workers have lost their jobs, accepted part-time hours or been put on furlough as a result of the economic disruption caused by COVID-19. According to the Centre for Economics and Business Research, British households will see a drop in their disposable income of £515 a month – that’s £14.2bn for the country overall.
So what steps can you take to bring down your monthly outgoings?
Review your TV subscriptions
With all major sports fixtures having been cancelled, you’re not going to be getting much out of a BT Sports or Sky Sports subscription at the moment. Investigate what options are available with your provider, such as a month’s free credit, a donation to the NHS, a different package or a temporary suspension. If you’ve been binge-watching films, check out which package between Netflix or Sky suits you best – and which has the most free extras. Remember, if you’re over 75, the charge for the TV licence, due to be implemented in June, has now been postponed to August.
Look into remortgaging
The largest household bill for many people is their mortgage so reducing this can have a major impact. Bear in mind, most of the best mortgage deals are for a limited period so if you’re coming to the end of yours, or your property has gone up in value, it’s worth investigating what else is available. Remortgaging could save you a hefty chunk off your monthly expenses, especially with interest rates being so low at the moment. You may also be able to borrow at a lower loan to value (LTV) rate now, because you may own more of your property than when you took out the mortgage originally.
Make sure you’re not just moved to your lender’s standard variable rate at the end of your current deal. You can, in fact, agree to a new rate six months before the end of the fixed-term so if your existing deal ends this summer, start taking proactive steps now.
You may also consider contacting your lender for a three month mortgage payment holiday.
You may well have noticed your energy bills going up as you’re spending more time at home. So this is a key area to try and save some money. Consumer watchdog, Which?, state that a household that uses an average amount of energy would save £388 per year if they switched to the cheapest deal on the market from the one at the level of the price cap. So if you’ve never switched supplier or you’ve not changed supplier in the last couple of years, you’re probably paying too much. Take the opportunity now to try one of the price comparison sites. Bear in mind though, that it’s worth digging a bit deeper than the initial list they present.
Talk to your broadband supplier too and try and negotiate a better deal or think about switching providers to benefit from some of the cheap introductory prices on offer. Many phone providers have also been offering free allowances so check to see if you’re entitled to any free data or minutes.
Think about car insurance
You won’t be making as many journeys in your car. As a first step, ask your insurer to change your policy from commuter use to social use which may reduce your premiums. But Admiral, the UK’s largest insurer, has already given their customers a £25 rebate. This has prompted MPs to call on the Government to get other providers to follow suit. So while you’re talking to your insurer, ask them what they are prepared to do in these very different times.
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers LLP or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.