How to manage bills

Bills can be stressful – so managing them effectively is a great way of getting peace of mind.

It can be tempting to ignore bills when you know it can be a struggle to pay them. But the last thing you want is for them to start piling up. Missing bill payments can also affect your credit score.

Here are some ideas to help you stay on top of your money by keeping your bills under control.

1. Check if your bills could be cheaper

The rise in the energy price cap will mean higher bills for millions of households.

However, the government has now brought in a new Energy Price Guarantee Energy Price Guarantee This link will open in a new window, which limits the price that suppliers can charge for gas and electricity.

It means a typical UK household will pay no more than £2,500 a year on their energy bill for 2 years from 1 October 2022.

Cheaper deals for utilities like gas, electricity and water may no longer be available, but you could still try using a comparison website to check that you’ve got the best deal you can. The energy regulator Ofgem also has a list of accredited sites list of accredited sites.

2. Check your broadband

Broadband bills can be a big part of your outgoings too.

Many suppliers, including BT, EE and Vodafone, increased their prices in 2022.1

If you’ve gone beyond the minimum term of your contract, you can switch to another provider without paying a penalty. Check first about how much notice you need to give.

The regulator Ofcom says customers can also leave mid-contract without being charged a penalty, but only if a provider raises prices by more than the Retail Price Index (RPI) rate of inflation.

3. Choose the best way to pay

It’s worth thinking about how you pay your bills. You could save money, or give yourself more control over when you pay, depending on which method you choose.

• Automatic

Direct Debit is often the easiest way. It automates your payments, so you don’t have to think about them each month, and ensures your bills are paid on time. It can also be cheaper as some companies offer a discount if you pay by Direct Debit.

• Manual

Alternatively, if you’re registered for online, mobile or phone banking, you can use any of those to make payments when your bills are due. That way, you’re in control of exactly when you make a payment and how much. The disadvantage is that it’s up to you to remember when your bills are due.

• By post, or in person

If you prefer not to use digital banking, you can often post a cheque to pay a bill. Remember to allow up to 5 days for the recipient to process your cheque and for the money to go out of your account.

You can also pay many bills at your local Post Office. This can be convenient if you don’t have a chequebook, as you should be able to pay by cash or card. But you may charged a fee.

4. Make sure you pay your bills on time

If you haven’t automated all your payments, make sure your bills are organised. Set a calendar reminder so you won’t forget when each one is due. That way, it’s easier to make sure they don’t mount up. You’ll also avoid any late payment charges if you pay on time.

If you have paper bills, it’s a good idea to keep them all together.

Remember to make sure you’ve got enough in your account to cover your bills. That could help you avoid any overdraft charges.

Check all your bills carefully. That’s the best way to spot mistakes and keep an eye on whether any bills are going up, or down.

Try choosing one day a month and setting a reminder to check all your bills on that day.

5. Budget with tools

You can use our budget planning tool to see where you’re spending your money. You’ll also be able to see where you could make changes and potentially make savings.

If you have the HSBC UK Mobile Banking app, you can use the Balance After Bills feature. This estimates what you’ll owe for the month ahead, based on your regular bills. It then shows you how much you could have left, once those bills are paid. This can help make it easier to budget successfully from one payday to the next.

There’s also a wide range of other mobile banking apps which can help you organise a budget. Some allow you to put money for bills into a pot and keep it separate from your other spending.

6. See if you can save money by paying your bills annually

Some bills can be paid either once a year, or in monthly instalments. This usually applies to things like car, or home, insurance.

Paying your annual premium in one go can be the cheapest way to do it. But it can be difficult to afford lump sum payments – not surprising when you consider the average cost of car insurance is now £535.22.

Paying in monthly instalments makes it easier to spread the cost over the whole year. But you may end up spending more on average compared to those paying annually.

It’s worth looking to see if there’s any way you can pay the annual premium in full.

7. See if you can spread your council tax costs

Council tax is another bill that can seem scary.

The full amount for the year is usually payable in 10 monthly instalments rather than 12. This means you get a 2-month council tax break in February and March. That could give you valuable wiggle room to pay any other outstanding bills that you might have been struggling with.

If you’re finding it hard to afford the monthly amount, check to see if your local authority can help to spread the cost further. Many councils offer the option of making 11 or 12 payments a year instead of 10.

Get help with managing your bills

If you’re struggling to pay your bills, it’s best to get help straight away. If you’re going to be late with a payment, get in touch with the company you’re paying to discuss your options.