Do you suffer from bill phobia?

Ever-increasing financial pressures mean that one in four of us are now scared about opening our monthly bills, according to MoneySupermarket research.

Perhaps even more worryingly, one in five people put off opening and paying bills as a way of tackling their fears.

Of the 13 million or so Britons who stress about bills, more than half – or 54% - said the main reason was that the amounts they have to pay keep rising.

For about a third, however, their concerns about bills are fuelled by the knowledge that there is simply more money coming out of their current accounts than there is going into them.

One of the worst ways to deal with “bill phobia” is by delaying opening and paying your bills. Taking this approach means you will remain in the dark about how much you need to pay and risk getting punished with late payment charges.

Clare Francis, personal finance expert at MoneySupermarket, said: “When consumers are battling with rising bills coupled with a fall in disposable income, it is understandable that a ‘Bill Phobia’ phenomenon has developed.

“However, the worst thing people can do is bury their heads in the sand.”


Is “Bill Phobia” here to stay?

The bad news for people with “bill phobia” is that things are probably going to get worse before they get better, with household budgets set to be squeezed even further as the cost of living continues to rise.

Economists believe that the rate of inflation, currently at 4.5%, could well hit 5% within the next month, which is bad news for those already struggling to copy financially.

MoneySupermarket research indicates that three quarters of the adult population have already cut spending on socialising, almost half have reduced the amount they spend on essentials such as food and drink and 56% have neglected their savings because there is simply not enough money to go round.

Fortunately, there are some simple ways to make your bills less scary.

How to beat bill worries

A good first step is to look at how much you are currently paying for services such as gas, electricity, landline and mobile phone and to find out if you could save by switching to a better deal.

Francis said: “There are very real practical steps that can be taken to lower the cost of bills, so the dreaded envelope that arrives each month doesn’t have to be such a nightmare.

“Sitting down and looking at all of your outgoings before using MoneySupermarket to make sure you are on the best product for your individual needs is a great way of lowering your bills.”

The average energy consumer, for example, could save more than £300 a year – and protect themselves against further energy price hikes until June 2012 – by switching from a standard plan to Scottish Powers’ Online Fixed Saver Dec 12, which has an average cost of £1,020.29 a year.

If you have debts, you should also consolidate them on to the cheapest form of credit available, such as a 0% credit card or a low-rate loan.

The Barclaycard Platinum Credit card is the best Balance Transfer card on the market currently and offers 22 months at 0% on balance transfers, subject to a 2.9% fee, provided you switch your debts within the first 60 days.

After the introductory period finishes, the card has a representative annual percentage rate (APR) of 17.5%.

Other ways to keep bills down

Making small changes to the way you pay can make it easier to stay in control of your finances and bring your overall outgoings down.

“Switching to monthly direct debit payments, for example, can help with budgeting as payments are usually split equally over twelve months,” Francis said. “What’s more, many companies offer additional discounts for paying by this method.”

Other ways to increase the amount you have in hand when bills arrive include taking advantage of discount vouchers to reduce the cost of your weekly shop or a new pair of shoes, for example.

Deals available on MoneySupermarket’s vouchers channel at the moment include 10% off orders of George clothing at Asda Direct and a massive 30% off online or in-store purchases at Gap.

But I really can’t pay my bills. What should I do?

If you are struggling to cope financially and have already tried everything to stay on top of your bills, it may well be time to turn to a free debt advice service for help.

These charitable organisations, which include the Consumer Credit Counselling Service (CCCS) and Citizens Advice, can help you to arrange payment plans that are within your means and get back on your feet again as quickly as possible.

Francis added: “Bills have to be paid and debts won’t go away, so ignoring the problem will just make the situation worse in the long term. Taking that first step today, on the other hand, could turn your life around.”

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

We’re free, independent and compare all UK credit cards, as well as offering exclusive deals you can’t get anywhere else.

Contact at Moneysupermarket House, St David’s Park, Ewloe, Flintshire, CH5 3UZ. © Ltd 2011.

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