New research shows that people in the UK massively underestimate the cost of their monthly household bills, miscalculating by £223, on average.
UK billpayers estimate their household bills, excluding rent or mortgage, come to £1132 per month, on average. However, when adding up outgoings such as gas, electricity, council tax, broadband, insurance and media subscriptions, the price actually totals a staggering £1355.
Whilst the majority of billpayers vastly miscalculated their outgoings, 17% were not even able to hazard a guess at how much they were paying each month.
The research, conducted by ultrafast broadband provider Trooli, found the top cause of this confusion is simply not paying attention to finances, with half of bill payers confessing that they had never added up all of their bills before.
Another reason for this huge gap in understanding is the number of subscriptions the British public have. One in five (19%) admit they have so many subscriptions that they have lost track, with a further 18% saying that hectic lives mean they are too busy to track down exactly what they are paying for each month.
This has turned into a vicious cycle, as a further 22% of Brits admit they still pay for subscriptions or services they no longer use or are not satisfied with, just because they are too busy to cancel or explore other options.
Mid-contract price rises are also partly to blame for people losing track of their monthly bills, with 26% claiming they misjudged their outgoings because they have been subjected to a recent price hike. One in 10 have experienced price rises they did not even realise were happening.
Lee Probert, Managing Director of Trooli, says: “Unexpected price rises for services we’re under contract for can really throw us, and quickly result in monthly bills feeling out of control. Even though Ofcom has set out regulations to try to mitigate against shocks from broadband providers, there are still plenty of increases hidden behind sneaky phrasing that can catch us out. We don’t believe anybody should have to pay an amount they didn’t sign up for, which is why we provide our customers with fully transparent pricing throughout their contract.”
The task of keeping track of monthly outgoings is having a serious impact on people. Over half (57%) are worried about rising monthly bills, with a further 41% finding keeping in control of monthly bills overwhelming.
In addition to this emotional stress, almost a third (30%) of Brits have gone into their overdraft because of an unexpected bill, leaving them at risk of unexpected interest or penalties.
The confusion about monthly bills is worst amongst those who are paying for services, like broadband and TV, in bundles. In fact, 19% admit they are not confident about how much they are spending on each service in a bundle. Nearly half (44%) say they are not even sure if they are getting a good deal on bundled services, choosing to continue risk overpaying instead of taking the time to calculate if the deal is actually worth it.
Lee continues: “Though it can seem convenient to have some of your bills in a bundle, these packages can leave us vulnerable to paying too much, or even for services you don’t use. Life is busy, and almost nobody has the time to sit down regularly to keep rising costs in check – especially when the service quality is staying the same. A clearer view of your monthly outgoings, paired with service you can trust from a provider that has no hidden costs or price increases, can really make all the difference.”
Check out Trooli’s guide to keeping track of your monthly outgoings.
