Britain’s ‘household chancellors’ set to slash nearly £4,500 from family budgets

New research from Bacs Payment Schemes Limited (Bacs), the organisation behind Direct Debit, has found that British households are taking the lead from Chancellor George Osbourne in making their own budget cuts, believing they can save almost £4,500 in the process.

The most popular cuts range from reducing supermarket bills, switching energy providers and paying regular bills by Direct Debit, to buying second-hand goods and spending less on, or shelving, DIY projects, holidays, and even scheduled car maintenance.

Bacs’ research found that 21% of ‘household chancellors’ have already cut supermarket bills by swapping brand names for basic ranges, with a further 27% saying they are likely to follow suit by the end of 2010, expecting to save £293 over the next 12 months.

In addition, 19% of British households have already changed energy provider and a further 13% are likely to switch before the end of 2010, estimating this will save them £282 in the coming year.

Mike Hutchinson, head of marketing at Bacs, said: “Nearly a third of energy tariffs offer customers a cheaper deal if payment is made by Direct Debit – taking advantage of that and of other Direct Debit deals on regular household bills can add savings of over £435.” 

According to Bacs’ research, 16% of British households estimate they have saved a whopping £707 this year by spending less on holidays, with 25% expecting to save a similar amount in the next year.  11% of households have cut DIY expenditure, while 27% intend to do so before year end, predicting a further £700 decrease in their outgoings.

Delaying the annual car service or new car purchase, has also been the focus of many domestic cuts, with nearly 25% of those surveyed expecting to save an average of over £800 by doing so.

This year, a massive 44% have already, or soon expect to turn to second hand purchasing, with an extra £259 of disposable income the predicted result.
 
However, despite the prospect of additional savings of up to £1,000, many households surveyed are reluctant to make cuts they perceive as sacrifices. For example, only 11% have, or are expecting to, cut TV subscriptions while just 5% are considering disconnecting from the internet.

Hutchinson concluded: “These types of austerity measures can be effective in helping households to cut their expenditure; and, while people may be reluctant to lose their luxuries, it’s heartening to know that many are aware of savings to be made by shopping around for good deals and offers relating to payment methods such as Direct Debit.”


Research from the Bacs Family Finance Tracker (BFFT)

Item	Average predicted savings
Paying regular bills by Direct Debit	£435*
Swapping brands names for supermarket basic ranges	£293
Switching energy provider	£282
Spending less of on holidays	£707
Shelving DIY projects	£698
Delaying annual car maintenance/purchasing new car	£819
Buying second hand items	£259
Cancelling TV subscriptions	£263
Cancelling broadband subscriptions	£173
Cancelling charity donations	£163
Cancelling life/endowment assurance	£343
Total	£4,435

*Household money savings of £435 have been formulated as follows: sourced June - August 2010

House	Saving (£)
Combined gas and electricity	300.00
Broadband / Digital TV	60.00
Landline telephone	18.00
Magazine subscription	21.42
Mobile phone	36.00
Total	435.42