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Overpaid utility bills top the table of the nation's biggest "money leaks" according to a new study. Paying ATM fees to withdraw cash, avoidable credit card interest and charges, club memberships and TV channel subscriptions also feature in the list of the top 10 money wasters that leach funds from Brit's bank accounts.
The research by Gocompare.com found that most of the top money wasters are linked to our tendency to set-up and forget financial arrangements, or by things we don't get round to like shopping around for a better deal or cancelling an unwanted subscription.
Rank - The UK's Top 10 Money Leaks - % 1 Credit built up on gas and/or electricity bill paid by direct debt 47 2 Credit built up on telephone bill paid by direct debt 39 3 Paying fees at cash machines to withdraw cash 24 4 Could save money by switching mobile phone tariff and/operator 22 5 Paying avoidable interest or annual charge on a credit card 18 6 Paying avoidable bank charge or overdraft fees 16 7 Failing to shop around for car insurance 12 8 Direct debts which should be cancelled 10 9 Underutilised cable TV/additional TV channel subscription 2 10 Underutilised club membership 1
Claire Peate, customer insight manager from Gocompare.com, said: "Most of us have small money leaks in our finances, which if left unattended can quickly add-up over the course of a year. A big area of waste occurs when bills or subscriptions are paid automatically by direct debt, allowing us to set it up and forget it. While direct debits are a convenient way to settle bills, if not regularly reviewed and managed they can lead to some accounts, such as utility bills, being overpaid while smaller payments for things like unwanted club memberships can be easily overlooked.
"Our survey also revealed that many people waste money by paying easily avoidable bank and credit card fees or by not taking the time to review their finances. Just under a quarter surveyed said they have paid ATM fees for withdrawing their own cash, but a little forward planning can help you avoid having to fork out these unnecessary charges. Check which ATMs your bank allows you to use for free and beware of cash machines in shops, pubs and petrol stations as these often charge for withdrawals. Also, banks charge customers who go into the red without permission, so it is sensible to pre-arrange an overdraft limit with your bank, even if you don't think you'll need it on a regular basis.
"Credit card holders should avoid missing payments or just making minimum repayments. Typically companies charge around £12 for missed payments and add interest to any outstanding balance, so the longer you take to repay the debt, the more you will owe. Also, the additional changes on credit card cash withdrawals make this an expensive way to borrow money.
"A regular spring clean of your finances to make sure that you are getting the best deals on your insurances, energy and other bills can plug significant leaks in your finances."