Families ‘underestimate household bills by £467 a year’

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Families have underestimated the cost of their main household bills in the last year including council tax, gas and electricity by nearly £500 typically, research has suggested.

More than 2,000 bill payers were asked by Santander Current Accounts to estimate their annual spend on their main household bills over the previous 12 months and it then compared the results with actual spending costs taken from figures provided by bodies such as Ofcom, Ofwat and Ofgem.

The research found that households underestimated their bill spending, made up of council tax, gas, electricity, water, television, phone and broadband costs, by around £467 over a year.

Bill payers typically under-estimated how much they spent on council tax by £672 and the actual bill was almost double their estimate, at £1,444 on average. At the other end of the scale they over-estimated their yearly TV, phone and broadband costs by £374 on average.

They also significantly underestimated their spending on gas and electricity. Gas bills were under-estimated by £243 and electricity costs were put at £72 lower than the actual spend.

More than one quarter (26 per cent) of those surveyed admit they do not read their statements properly, while one in 33 people (three per cent) said they do not open their statements at all. The number of people not opening their statements would equate to 800,000 households if the figures were projected across the UK.

One in nine (11 per cent) householders said they were unable to afford their bills and nearly half (44 per cent) of those surveyed said they were “only just” able to cover them. When asked how they budget for bills, two-fifths (41 per cent) of people said they do not do this, while one third (33 per cent) of people said they set money aside each month based on their own estimate of their bills.