One in five households (21%) are paying for subscriptions they have forgotten about or no longer use, according to research from comparethemarket.com these households are typically spending £265 a year on services they don’t need.
The research found only 28% of households check every month how much they are spending on subscriptions. As a result, unused or unneeded subscriptions are putting further pressure on household finances. The spending on unused subscriptions varies significantly by age. Nearly half of bill payers under the age of 25 (47%) have subscriptions that they don’t use, and these young people are squandering an average of £344 on these services each year. Only 9% of people aged over 55 have unused subscriptions, but these people are still wasting an average of £164 on them each year.
More than 17.5 million households subscribe to at least one streaming service such as Netflix, Amazon Prime or Disney Plus, according to the latest data from the Broadcasters’ Audience Research Board (BARB). Separate research from Ofcom’s Media Nation 2020 report also shows millions of UK subscriptions for these streaming services will be up for renewal soon. The regulator calculated that six million households signed up to a streaming service during the first lockdown. One year later, these services may no longer be needed as curbs on leisure activities are being lifted including the reopening of museums, cinemas, and restaurants.
Unused or unneeded subscriptions are putting further pressure on people’s finances as 51% of households said they had seen the cost of their monthly bills rise over the past 12 months. Despite seeing their bills increase, four in ten households (42%) admit they don’t regularly compare other providers for cheaper or more suitable deals once their contracts end. For some regular bills, such as mobile phones and energy, this could mean these households are paying far more than they need to for these services. Previous research fromcomparethemarket.com found households could typically save £494 if they switch to the cheapest suppliers for all their bills. As a result, one in three 33% households believe providers should do more to tell them when their contracts come to an end.
People can use online tools to help keep track of their contracts, regular payments and direct debits. In fact, over half (56%) of people say they are now more open to using financial technology and apps to manage their money than before the pandemic. comparethemarket.com has created a finance section within the Meerkat app which allows people to connect their bank accounts and see all their bills in one place. The free service automatically categorises your regular bill transactions and shows you whether payments have increased or decreased, with the option to look for a better deal that could save you money.
Anelda Knoesen, product lead for Open Banking, comparethemarket.com said “As social distancing curbs are being lifted, households may now be paying for subscriptions they no longer need. Reviewing household spending regularly and cancelling unused subscriptions can make a big difference in making ends meet. Our research shows young people could save hundreds of pounds by cancelling forgotten subscriptions or checking prices more regularly.”
“Shopping around is one of the most effective ways to cut the cost of monthly bills and relieve some of the financial pressure, potentially saving hundreds of pounds each year. Using the “your bills” in the Meerkat app to track your subscriptions and direct debits can help you see exactly what is going in and out of your account every month.”