Are you throwing money down the drain? Check your bank statement to save £100s
More than half of UK adults haven’t reviewed their direct debits and standing orders in the last 12 months, which means they could be throwing money away by paying for contracts, subscriptions and memberships they no longer need.
Research by Gocompare.com Money estimates that the average person could save £360 a year by going through their current account and credit card statement to weed out unwanted repeat payments, though for some, the amount could be much more.
TV and film subscriptions top the list with a fifth (19%) of people saying they pay for satellite TV subscriptions with channels they hardly watch, while 8% think their Netflix (or similar service) is a waste of cash.
Subscriptions to no-longer wanted magazines (6%), gym memberships (6%) and apps that are hardly used (6%) were also listed as areas of unnecessary expenditure along with Amazon Prime membership (5%), wine club membership (5%) and charity donations paid by direct debit (5%).
Worryingly, 14% of those surveyed said if they went through their current account and credit card statements they could definitely find ways to save money, while 7% already know there are subscriptions, donations and memberships they could and should cancel.
Matt Sanders, head of money at Gocompare.com, said: “Regular payments such as direct debits and standing orders can take a lot of the hassle out of managing your finances. They ensure bills are paid automatically and payments are not missed or late. In some instances, such as energy bills, payment by direct debit can actually qualify you for a discount.
“On the flipside, however, unless you regularly review your bank and credit card statements you can end up making regular payments for things that you no longer want or use. Once set up, direct debits and standing orders are all too easy to overlook and forget about.”
Here are the comparison site’s top tips to detox bank statements:
Make time to review your statements
Bank and credit card statements aren’t riveting reading but it’s important to make time in your diary – give yourself an hour to do a big annual check properly, at a time when you can concentrate on the job in hand.
Get your bank and credit card statements out or log on to your online account
Most regular payments will be monthly, but some may be quarterly bi-annually or annually – so ideally you will want to be able to access your statements over the last 12 months to be sure you’ve got everything.
If you haven’t kept copies of your bank or credit card statements, your provider should be able to get them for you or give you a list of all the regular payments from your account.
Look for direct debits and standing orders and identify what they are for
Go down your statement and identify all your direct debits (often shown as ‘DD’ on statements) and standing orders (‘SO’). If you see a payment you don’t recognise, perhaps because an abbreviation or acronym has been used, contact your provider. It should be able to clarify who the payment is being made to.
Check your statements for continuous payment authorities (CPA)
A continuous payment authority (also known as a recurring payment), is when a regular payment is taken by a company from your debit card or credit card. Businesses such as gyms, subscription websites and telecoms (including mobile phone contracts) may use this type of payment method. It gives them the power to take money from an account whenever they want and they can change the payment amount.
Spotting a CPA on you bank statements can be tricky as payments may not be taken on the same day each month and the amount can vary. You can cancel a CPA through the company which was taking the payment.
Check contract terms and cancellation rights
Before cancelling payment for any goods and services you’ve identified as surplus to your requirements – check whether any terms and conditions (such as exit penalties and notice periods) apply and if you have paid several months in advance, whether you are entitled to a refund.