10 things you should always get for free

Running a household is an expensive business. Energy bills, phone costs and mortgage repayments can all quickly diminish your bank balance. But there are many things you may be spending money on that you needn’t be.

Here are 10 products no one should be paying for:

1. Identity theft insurance

Identity theft has become big news, so there are plenty of firms hoping to cash in with identity theft insurance. For example, pay £90 a year to specialist insurer CPP and it’ll give you an ID health check, unlimited access to your credit report and a fraud expert to help you get any stolen money back.

But you don’t need to pay for this. Under the Consumer Credit Act and the Banking Code, you can claim back money from your bank or credit card provider if you are the victim of identity theft without paying a penny. And you can easily access your credit report for £2 through the major credit agencies (Experian, Equifax and Call Credit).

Saving: £90 a year

2. Extended warranties

Buy an electrical product and most companies will try to push an extended warranty on you. But these policies are costly – typically around 25% of the price of the product. There are also exclusions such as accidental damage to watch out for.

As you are already entitled to a refund if the product is faulty under the Sale of Goods Act 1979, and most products come with a year’s warranty, these policies tend to be a complete waste of money.

Saving: £39 a year

[Related feature: The Sale of Goods Act – your consumer rights explained]

3. Paid-for current accounts

Packaged accounts, which include standard current account facilities and extras such as breakdown cover, cost around £15 a month, but they don’t often save you money. For example, NatWest’s Select Gold Account costs £155 a year for a current account and includes add-ons including mobile phone and travel insurance.

The bank claims the account will save you £713 a year but this is based on mainly unnecessary costs. For instance, you can add your mobile phone to your home contents insurance for a small fee and an annual travel insurance policy costs from £29 with insureandgo.com. When you add up all the individual savings, NatWest’s account costs you £35 more than it saves you.

Saving: £35 a year

[Related link: Switch to a free, top-rated current account]

4. Payment protection insurance claims

Lots of firms have started cashing in on the payment protection insurance mis-selling scandal by offering to help victims put in their claims in return for a chunk of their compensation. For example, claims firm Gladstone Brookes deducts 25% of any money you receive in return for processing your claim.

With an average compensation payout of £2,750, according to the Financial Ombudsman Service, that means they are pocketing nearly £700 per claim. But the process is very simple and won’t affect the outcome, so make a claim yourself and save a fortune.

Saving: £700

[Related feature: How to reclaim your PPI premiums]

5. CHAPS payments

CHAPS sterling payments allow you to transfer money instantly between banks within the UK for a charge of around £20. However, the Faster Payment system works almost as quickly and is free.

Sandra Quinn, spokesperson for the Payments Council, says: “All payments will be completed within two hours and the benefit of Faster Payments is it works all day everyday, whereas CHAPS is a business-day-only service.”

Saving: £20 per payment

6. Mobile phone insurance

Losing your mobile phone can be annoying and costly. Mobile phone insurance can safeguard against this but it costs £7 a month on average and only tends to pay out if your phone is stolen or damaged.

It may also be completely unnecessary as your phone may be covered under your home insurance policy. If not, you can add an ‘all risks’ option to your policy for around £15 a year to include valuables taken outside of your home.

Saving: £69 a year

[Related link: Compare home insurance deals]

7. Premium-rate phone numbers

Premium-rate phone numbers are expensive and can leave you with a huge monthly bill. Some landline providers will waive certain calls to these numbers but if you call them from your mobile, you’ll likely be charged even more.

Calls to ‘09’ numbers are the most costly – prices can rocket to £2.04 per minute and minimum call durations usually apply – and lots of companies charge 35p a minute for calling numbers starting with ‘08’.

The website saynoto0870.com lists alternative local numbers you can use, which will be included in your call allowance. Many company websites also list a separate phone number to be used when calling abroad. These will start with +44 and will only charge you the local telephone rate.

Saving: £2 per call

8. Using your credit card abroad

Most companies will charge you if you fl ex your plastic abroad. The charges vary between providers but a 2.75% commission fee is not unusual. So spend £500 on your Barclaycard while you’re away and you’ll end up handing over around £14 for the privilege. However, some credit cards waive foreign exchange fees, such as the Halifax Clarity Card or the Post Office Platinum Card.

Saving: £14 per trip

[Related link: The best-selling credit cards]

9. Debt management plans

The last thing you need when you’re in debt is another bill but some firms charge extortionate amounts to help you sort out your debts. For example, Debt Free Direct charges up to £100 a month to help people create and maintain a debt management plan.

However, this is a complete waste of money because charities such as the Consumer Credit Counselling Service and National Debtline offer the exact same debt management service completely free of charge.

Saving: £1,200 a year

10. Basic NHS dental treatment

Dentists are currently being examined by the Office of Fair Trading to see if they offer fair service to patients. The main complaint is that NHS dentists are charging customers too much for basic treatment. For example, an examination should cost £17 and include a scale and polish so don’t cough up £35 for a separate hygienist appointment.

Saving: £35 per visit

[Related feature: Five pricy things you can get for free]

More from Moneywise.co.uk

Receive a free copy of Moneywise magazine packed with advice, information and tips on how to manage your money with confidence