How to to slash the cost of those bills

It’s bills week – all the big January bills are coming in and many are struggling to pay. Martin Lewis, our Money Saving Expert, says it’s a great opportunity to slash the cost of mobile phone, water, energy, home phone, broadband and digital TV bills... so today we’re doing a ‘how much?’ show.

Of course, one of the reasons for sorting this out is to clear any debts, so if you haven’t, see Martin’s debt cost-cutting masterclass.

Q. How much should people pay for their mobile?

Martin’s answer: If you’re paying more than £18 a month you have to question why. I set this benchmark as O2 has a Sim-only contract, with unlimited minutes and texts and a big 4GB of 4G data for £18 a month. There are reasons for paying more if 1) your current contract includes the cost of a handset, 2) you have a low credit score so can't get a contract, 3) you roam, or 4) you need more data.

Quick tips to cut costs

  • Use Billmonitor and MobilePhoneChecker to interrogate your bills.

  • Buying a handset and using a cheap Sim-only deal usually undercuts a contract.

  • If you’re near the end of your contract, haggle.

Q. How much should people be paying for gas and electricity?

Martin’s answer: Someone with typical bills using a big six standard tariff pays around £1,100 a year – so a little over £90 a month for gas and electricity, which is massively over the odds. Yet 70% of people are on a big six standard tariff. For the same gas, same electricity, same safety, just a different rate and call centre, you could be paying £780 a year – so £65 a month. It’s a no-brainer – you should check if you can save now.

There’s no one cheapest provider, it depends on where you live and your usage, so use Martin’s Cheap Energy Club to compare, or any Ofgem-approved comparison site. Of course if your usage is different your savings will be different, but they should be in proportion.

Quick tips to cut costs

  • The cheapest way to pay is by monthly direct debit – just ensure you do regular meter readings.

  • You can still compare if you’re on prepay or electricity-only.

  • Most cheap deals only last a year or two, so monitor to switch again when they end.

The savings can be huge as Jbee tweeted me: “@martinslewis, finally switched energy suppliers for the first time in 30 plus years #saving £815 boom”.

Q. How much should I pay for my water bills?

Martin’s answer: The typical bill is around £385 a year, though it varies with where you live, and some on meters can pay as little as £150 a year, if you don’t use much water.

My rule of thumb is if your home has more bedrooms than people (or the same number), then it's likely you'll save by switching to a free water meter (in Scotland there’s a fee), like Laura who tweeted me: “@martinslewis I went from £40 a month to £15 when I switched to water meter in my flat (thanks to you) over the year. That is huge.”

Use the Consumer Council for Water’s calculator to see. Just keep an eye on your bills to check you’re saving, and if not you can switch back after 12 months, or a month after your second bill, whichever is later.

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