Martin Lewis gives advice on paying mortgage with savings
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Savers and mortgage holders are regularly advised by the likes of financial journalist Martin Lewis to seek out better deals where they can either boost their savings pots or lower their outgoings. Today, Yolt has highlighted just how costly it could be for consumers should they not heed this advice.
Recently, Yolt surveyed 3,007 UK adults, 490 of which said they never review their household budget and expenses.
The research showed over one in six (16 percent) UK adults never review some of their key household expenses, which could indicate there are 8.6 million in the UK who are “bill blind”.
These savers could “be missing out on the most competitive deals available” according to Yolt’s analysis.
This could be worsened by the recent news that the energy price cap is set to rise 12 percent by October – the biggest increase to date.
Additionally, Yolt’s internal user data indicated spending on household utilities, such as gas, electric, broadband and water, has increased by seven percent year-on-year from April 2020 to April 2021.
The same survey from Yolt also found 38 percent of UK adults have never checked they’re on the best deal/rate for their bank account.
This also stretched to credit cards (27 percent), energy bills/tariffs (18 percent), broadband (18 percent) and mortgage deals (11 percent).
Aside from not looking to see how they can save money by switching, Yolt also found consumers often also lose money by not shopping smart, with one in four UK adults (27 percent) never comparing prices at different supermarkets, a third admitting having forgotten to return something they didn’t want (31 percent) and 24 percent going beyond their arranged overdraft limit at least once a year.
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The findings also pointed to a “worrying issue of potentially more serious financial trouble”, such as ignoring bank statements altogether (22 percent) and never paying more than their minimum repayment on credit cards (15 percent).
Pauline van Brakel, the Chief Product Officer at Yolt, commented: “Many consumers have had a challenging period financially as a result of the pandemic, with a significant number of one in 10 UK adults (12 percent) seeing their monthly expenses exceed their income over the last year leading to an average overspend by £277 a month, according to our research.”
Ms van Brakel went on to break down what consumers could do to counter these difficulties: “It is a good time to take stock of your regular outgoings, checking in on where you could be saving by taking advantage of the best deals available and cutting down on unnecessary spending.
“Our own user data shows utility bills are rising, adding additional strain to household finances.
“Therefore, it’s more important than ever to ensure you’re on a tariff that gives you the best value.
“Switching providers using price comparison websites via Yolt partner MoneySuperMarket could save you hundreds of pounds – and help turn those not-so-good habits into good ones.”
MoneySuperMarket itself echoed this sentiment recently as it emerged that Ofgem would be raising the energy price cap.
Stephen Murray, MoneySuperMarket’s energy expert, commented at the time: “This morning’s announcement is dreadful news for the 11 million households currently on standard or default tariffs. It’s further proof the energy price cap doesn’t fulfil its stated objective of protecting consumers.
“When taken together with spring’s nine percent rise, this 12 percent increase means bill payers that rely on the cap will have seen their bills shoot up by an eye-watering 21 percent since the start of the year, working out as an additional £235 per year or £20 extra per month for the average user.
“Cost wise, it’s equivalent to boiling a kettle for 555 hours straight. Worse still, it comes into effect on October 1, as many of us turn our heating back on for the colder months.
“The news is no better for customers on prepayment tariffs that will see an even bigger increase of 13 percent from 1st October, equivalent to £153 per year for the average user.
“This unwelcome price increase is driven by a cocktail of factors, chief among them the global rise in wholesale energy costs, more domestic usage throughout lockdown, and now UK business energy consumption also rising as restrictions have ended.
“The good news is that bill payers can minimise the impact of these rises through the simple act of switching suppliers and your tariff. Doing this can deliver significant savings, with the best deals in the market consistently hundreds of pounds cheaper than standard tariffs. It takes just minutes to switch, so if you’re on a standard variable tariff or if your fixed rate deal is coming to an end, take action and shop around.”
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