Six in ten households failing to take action on household bills

20th September 2024

More than half (57%) of households with children have not taken significant action to save more than £100, despite many seeing their household bills increase recently according to Compare the Market’s latest research.

To combat rising prices, households could save up to £756 by switching their car and home insurance through price comparison sites.

Nine in ten households (90%) have seen their regular bills increase in the past six months. Almost half of households (47%) said they have seen their energy bills rise over the last six months. Others noted increases in their water bills (45%), broadband (40%), car insurance (37%), phone bills (32%), TV services (30%), home insurance (29%), rent (25%), and mortgage costs (14%). On average, people would require a minimum of £210 more a month or £2,560 per year to help them to meet their household financial obligations.

High food prices ranked as the highest concern for household finances over the next twelve months, cited by four in ten (41%) in the research. Winter energy bills (38%) and inflation (23%) were also prominent concerns, with others highlighting rising rents (17%), higher petrol prices (18%), as well as rising insurance (15%) and mortgage costs (10%).

Nevertheless, some households said they have been taking action to protect their finances in the context of economic instability, market uncertainty, and high prices. This includes cutting spending (37%), using less energy to keep their bills down (34%), and shopping at cheaper supermarkets (29%). Others have been choosing unbranded items at supermarkets (24%), reducing discretionary spending such as hobbies and holidays (22%), and switching providers where possible for household bills (15%). Others have even been helping their partners (19%), children (12%), parents (12%), and friends (10%) to organise their finances and save money in the past month.

Mortgage costs have increased in the past six months, most had reached the end of their fixed term (63%). Of those whose fixed term mortgage had ended, the largest proportions (21%) remortgaged onto a two-year fixed rate or a five-year fix (20%). Others stayed on their standard variable rate in case the Bank of England cut its base rate (15%) or remortgaged onto a ten-year fixed rate (11%). This includes 15% who said they’re waiting to see if the Bank of England cuts rates, and 11% who said they haven’t got around to switching. Staying on the standard variable rate could mean these households are paying substantially more than they need to for their mortgage.

Some who have seen their mortgage costs increase recently have been acting specifically to address this outgoing. One in three (34%) have shopped around for a cheaper rate, while others have overpaid on their mortgage (19%), extended the length of their mortgage (15%), and even downsized their home (14%).

Credit card debt has also been a challenge for some households while living costs remain high. Over four in ten (42%) said they have struggled to repay their credit card balance in full in the past six months. For the largest proportion of this group, this was due to the rising cost of everyday expenses, such as food and fuel (35%), while a similar proportion highlighted the need to prioritise other household bills, like energy or rent (33%). Others said they had borrowed more than they could afford to pay off (21%) or the interest rate on their card had increased (20%).

Almost six in ten (57%) credit card holders said they did not have a strong credit rating, with nearly one in six (15%) noting that their credit score has got worse in the past six months. Nevertheless, over six in ten (17%) said they were not aware of either the positive or negative impacts credit cards can have on their credit score, including nearly three in ten (28%) of people aged over 55.

Despite many credit card holders noting that they did not have a strong credit rating, six in ten (59%) said they are confident in their ability to be accepted for a future credit card application. One in six (16%), however, said they have had their application for a new credit card declined in the past six months. For the largest proportion (27%) this was due to them having a poor credit history, while for others it was due to having too much debt (26%) or because their income was not high enough (25%).

Guy Anker, Money Expert at Compare the Market, said “While many households have seen their outgoings rise in recent months, our research shows that more people are missing out on potential savings to help offset higher bills, because of inaction.

“The key message is for everyone to proactively look for ways to make savings on your bills by ensuring you don’t overpay on things such as insurance, broadband, mobiles and credit cards. Taking action to compare prices and features offered by different providers is one of the best ways to try and save money and get the right deal for you. ”

Households with children at home missing out on savings

Money Action

Index

2022 2023

 

2024
Households missing out on savings 63% 55% 57%