Top tips: reducing household bills and saving for retirement

At the end of 2021 energy bills have hit the headlines and it is highly likely our everyday household bills are going to skyrocket. We all want to make sure our financial budgets stretch to allow us to continue accessing essential products and save for future times. If we cannot put money away for our retirement, our post-work years may be challenging. Even if we sidestep financial issues now, we may be setting ourselves up for a harder future if we do not continue to save for retirement.

Here are a few simple tips for cutting down monthly bills. While some seem a little obvious, there may well be a nugget there that will help keep your head above water in these uncertain times.

Gas and electric bills

According to a report in April 2020 by the Energy Savings Trust (EST), heating accounts for 55% of our household bills. This is a good place to start saving.

• It is highly likely that a new boiler will run more efficiently than an old one but making that change can be expensive. As an alternative, get your boiler serviced at least once a year and consider replacing old controls such as the timer, the programmer and the weather compensating thermostat.
• Clean your radiator system regularly. Which magazine found that when sludge gathers in radiators, it could increase heating bills by as much as 25%.
• Try reducing heating by just one degree. EST found that this action can reduce heating bills by as much as £80 a year.
• Heat rises so the top of the house always heats first. Get used to heating where you are and turning off radiators. This can seem a hassle for some but it is well worth it for the money it can save.
• By adding more thermostats to the house (smart thermostats) you can easily set the temperatures for different rooms.

Water bills

• Wait until you have a full load before using your dishwasher or washing machine.
• Using a shower uses less water than a bath. Using a low-flow shower head further reduces water use. Think about wasted water flowing into sinks, such as when brushing your teeth or cleaning dishes. If you are not using it, turn it off.
• Use a water butt to catch rainwater outside of the house. This can be used for such jobs as watering plants or washing the car.
• Watering your lawn early in the morning or late at night prevents the water evaporating in the mid-day heat.
• Check for leaky taps and water outlets and get them repaired.

Broadband/telephone and television

Broadband, telephone and television are often provided in one package. This can be useful as you have costs in one place through one provider under one direct debit. But you may be paying through the nose for some facilities, while other utilities may not offer exactly what you need. 

Think about what your television service provider offers. Do you really watch all those channels? Are there cheaper providers on the market?

In the case of your telephone, do you need a landline? Could you save on your landline by just using your mobile? Is there a cheaper option out there?

As with everything we buy nowadays, it is best to compare prices on the internet – and broadband is no different. Many hold back from changing broadband through fear they will lose their email address. But some providers allow you to take it with you.

Food shopping bills

The key to low shopping bills is threefold: keep a strict budget, always work from a shopping list and keep the reason why you need to save money front of mind.

• By shopping with the same retailer, you get to know where the good deals are for your essential buying and perhaps benefit from a loyalty card.
• Think twice about those appealing offers – they may seem great, but is it something you really need?
• Factor treats into your budget to keep you motivated.
• Watch out for those danger areas where little products are calling out “buy me”, such as queueing for the cashier.

Council tax

• Make sure the council is aware of who is in the household. You may be due a lower payment.
• Check you are in the right council tax band. If you feel it is wrong, you may have to evidence this with the council by showing that a neighbour has a lower council tax but has the same building footprint.
• Are you due a discount or a reduction? Check with your local authority.
• If money is tight consider spreading your bills over 12 rather than 10 months – the local authority can arrange this.
• If you receive pension credit you are entitled to a reduction in your council tax.

Hence, payments can continue to be taken out of our bank accounts even though we do not use the goods or services anymore. Check your account to filter out those payments you would rather terminate.

It is so easy to sit back and think a bill is being dealt with by a direct debit. However, outgoings need to be monitored to ensure you are using the least expensive option. In order to find the cheapest rates, regularly compare what is available on the market (especially in the current environment where prices are rising). Take a look at your account now. Are all those outgoings necessary in the current economic climate? Are bank charges and interest fair? Is it time to make changes?

Pension contributions

Don’t forget those contributions you are making for your retirement. When you consider the performance of your pension fund, do you need to increase or decrease your contributions? Or perhaps now is the time to contemplate moving your money to another provider or fund?

You could end up saving money and also securing your future at the same time.  With that in mind, also be aware that from the age of 55 you can access your pension if you are in need of an extra injection of cash. Releasing pension money early isn’t right for everyone as it will leave you worse off in retirement. That’s why it makes sense to chat with a financial advisor before making any decisions about your pension. If you need support with reviewing your pension, just give us a call.

Taking pension money early is not right for everyone as it will leave you worse off in retirement. Also, tax treatment depends on your circumstances and is subject to change. That’s why it makes sense to get help from a regulated specialist.