When was the last time you checked what was coming out of your bank account? Over half of adults (57 per cent) haven't reviewed their direct debit and standing orders in the last 12 months, according to a survey by GoCompare yet 14 per cent of people said if they checked their statements, they could definitely find ways to save money.
In fact, the insurer says we could each save around £360 a year simply by checking current account and credit card statements and culling contracts, subscriptions, direct debits, memberships and standing orders we no longer need.
TV and film subscriptions top the list of unecessary expenditure with a fifth of people saying they pay for satellite subcriptions with channels they don't watch, while 8 per cent think their film streaming service such as Netflix is a waste of money. Gym memberships and apps that are hardly used were also revealed as cash wastes along with Amazon Prime membership, wine club membership and charity donations paid by direct debit. So track down those statements and use our step-by-step guide to be better off today!
5 steps to cleaning up your accounts
1. Make time to review your statements
Bank and credit card statements aren't riveting reading but, it's important that you take the time to understand them. So make time in your diary – give yourself an hour to do a big annual check properly – at a time when you can concentrate on the job in hand.
2. Get your bank and credit card statements out or log on to your online account
Most regular payments will be monthly, but some may be quarterly bi-annually or annually – so ideally you will want to be able to access your statements over the last 12 months to be sure you’ve got everything.
If you haven't kept copies of your bank or credit card statements, your provider should be able to get them for you or give you a list of all the regular payments from your account.
3. Look for direct debits and standing orders and identify what they are for
Go down your statement and identify all your direct debits (often shown as DD on statements) and standing orders (SO).
- A direct debit is set up when you sign a mandate to let a company take a fixed or variable amount of money from your account. You are entitled to contact your bank to cancel a DD instruction any time you like
- A standing order is an instruction from you to your bank to pay a fixed amount at regular intervals. You can set up a standing order to keep on paying indefinitely or to end on a certain date or after a set number of payments have been made. You can also change the payment amount or cancel an order whenever you want.
If you see a payment you don't recognise, perhaps because an abbreviation or acronym has been used, contact your provider. They should be able to clarify who the payment is being made to.
4. Check your statements for continuous payment authorities (CPA)
A continuous payment authority (also known as a recurring payment), is a regular payment taken by a company from your debit card or credit card. Businesses such as gyms, subscription websites and telecoms (including mobile phone contracts) may use this type of payment method. A CPA gives them the power to take money from an account whenever they want and they can change the payment amount.
Spotting a CPA on you bank statements can be tricky as payments may not be taken on the same day each month and the amount can vary. You can cancel a CPA through the company which was taking the payment.
5. Check contract terms and cancellation rights
Before cancelling payment for any goods and services you’ve identified as surplus to your requirements – check whether any terms and conditions such as exit penalties and notice periods apply and if you have paid several months in advance, whether you are entitled to a refund.
- For more money-saving tips, pick up the latest copy of Yours magazine