Yahoo Finance 
Why ignoring these commitments will cost you
The worst thing you can do when signing up to any form of long-term financial commitment, whether it's a mobile phone contract or a mortgage, is to stick the documents at the back of the drawer and forget about them. In fact it can end up costing you far more.
Mobile phones
Research from Which? found that we waste £355 million a year on phone handsets that we’ve already paid for.
Some networks combine the cost of the tariff and the handset over the minimum term, so contract holders won’t know how the cost of the contract and phone are split.
O2, Virgin Media, Tesco Mobile and Utility Warehouse have tariffs where the different costs are displayed, while Vodafone, EE and Three still have a bundled price.
Take a look at how two tariffs compare for an iPhone 6 16GB on O2 and Vodafone.
O2 | Vodafone |
iPhone 6 16GB 24 month contract Unlimited calls and text 5GB data | iPhone 6 16GB 24 month contract Unlimited calls and text 4GB data |
Handset: £25 a month Airtime: £24 a month Total: £49 | £48.50 a month |
So at the end of the 24 months, the handset is fully paid off with O2. As a result you won't pay another penny towards the handset, so your monthly bill will drop to £24. However, with providers like Vodafone, the size of your bill won't change.
[Find the right mobile contract for you with Recombu]
Energy tariffs
A smart way to keep your energy bills low is to sign up for a cheap fixed energy tariff. However, when the fixed period comes to an end, you'll be moved onto the standard tariff, which will almost certainly cost you more.
Make sure you don’t get caught out by reviewing your energy tariffs regularly, and keeping an eye on those bills.
[See if you can save on your gas and electricity bills]
Savings accounts
There are plenty of savings accounts which offer a bonus to your rate for 12 months or so. After that, the rate on offer will drop significantly. There's nothing necessarily wrong with that - we'd rather get a good rate for 12 months than not at all - but it does mean you need to make a note of exactly when the bonus will end so you can move your money to a new home.
Current accounts
It's not just savings accounts that only offer a top rate for a certain period of time; some current accounts do it too.
For example, the Nationwide FlexDirect Account pays a market-leading 5% on balances up to £2,500, but that's only for the first 12 months. After that it drops down to just 1%. So you'll need to move your money after a year to keep getting a good return.
[See if you can switch to a better current account]
Auto-renewal insurance
The biggest insurance trap is auto-renewal. It’s a sneaky way for insurers to make a few extra quid out of you. Of course you’re covered for another year, but at a significantly inflated price.
If you are on an auto-renewal policy, make shop around for a new deal a good month before your renewal date to give you time to find a better deal. It could save you hundreds of pounds.
[Compare car insurance policies]
Broadband
Many broadband deals charge a much smaller monthly rate for the first few months. In fact, some even go so far as to claim the broadband is 'free'. Again, make a note of when that promotional period comes to an end so you don't get a nasty shock when suddenly the size of your bill increases.
[Get the best broadband deals in your area with broadbandchoices.co.uk]
Mortgages
When your initial fixed or tracker mortgage rate comes to an end, you'll move onto your lender's Standard Variable rate (SVR). These are almost always far more expensive than the deal you have just left. They can also be further increased at any time, irrespective of what's happening with Bank Base Rate.
Again, don't just sit and let this happen. Shop around for a new deal.
Gym memberships
According to Bespoke Offers, people in the UK waste an average of £65.60 a month on gym memberships that they never use. That works out as a whopping £787 a year
Cancelling a gym contract can be pretty tricky. You’ll generally be tied to a minimum term contract and there are often insane cancellation fees to take into consideration. Make sure the read the small print first, and pay particular attention to the rights to cancel agreement.
Gym memberships are another area where you can fall foul of auto-renewal, so make a note of your renewal date and get it cancelled well in advance.
If you want the option of going to the gym, but don't want to risk signing up to a lengthy contract that you won't make the most of, it might be worth trying a service like PayAsUGym, which allow you to buy daily passes for gyms.
Subscriptions
Many of us shell out on subscriptions for services we don't really use, whether it's digital TV, streaming services like Spotify and Netflix, magazines or even dating sites.
It may be that you are tempted in with a free trial period, but don't remember to cancel once that initial free trial has finished.
Old addresses
Millions of us are registered at more than one address, and as a result are missing out on all sorts of important post, incurring fines and missing out on rebates and gifts. We are also increasing the risk of identity theft.
