This gap is 65 per cent (£303) greater than last year, when the average amount households underestimated their bills by stood at £467.

Council tax was the biggest culprit – it is underestimated by £721 per year. Bill payers were also shown to underestimate gas (£279) and electricity (£91) payments and over-estimate their expenditure on TV/phone/broadband bills (£386).

One reason why estimated and actual bill spend differs may be a lack of attention to bill statements. More than a quarter (26 per cent) of bill payers admit they do not read their statements thoroughly, while four per cent – equivalent to 1,000,000 UK households – do not even open their statements.

One in eight (13 per cent) have never supplied a meter reading or couldn’t remember the last time they gave one for either their gas and/or electricity. On average, the last time bill payers reviewed their providers for a better offer was more than a year ago (13 months).

Matt Hall, Head of Banking at Santander, said: “Increases in household bills have added to the cost of living in recent years and it’s more important than ever that people check their bills thoroughly. Some can be tricky to understand, so it’s important that households keep an eye on statements and call their supplier if anything is unclear.

“Bill payers should regularly review their supplier to make sure they’re getting a good deal but should also consider the most cost effective way of making payments. Many suppliers offer a discount for paying by direct debit for instance.”

David Mann, Head of Money at uSwitch.com, said: “Consumers are in a lose-lose situation with everything shooting up except for their income. It’s time to start paying serious attention to managing household bills. By cutting the amount you spend on the essentials, you’ll have more money to spend on the non-essentials, which is welcome news at this time of year.”