Santander

Santander

May 17, 2012 05:54 ET

Homeowners Hit Hard by Household Bill Hikes

- Household bills have risen at nearly double the rate of inflation over the past decade

- Gas bills have trebled and electricity has doubled in price (1)

- 29 per cent of Britons say spiralling bills have reduced their overall standard of living(2)

- Brits reduce usage of electrical appliances, turn heating down, make homes more energy-efficient and change financial behaviour to combat rising bills(2)

- One in 10 say they won't be able to cope financially with further increases(2)

LONDON, UNITED KINGDOM--(Marketwire - May 17, 2012) - Consumer finances are being squeezed by household bills that are rising much faster than inflation, according to new research(1) from the Santander 123 account.

The findings reveal that, in the past 10 years, the cost of household bills has risen by 71 per cent, almost twice as fast as the 38 per cent increase in inflation as measured by the Retail Prices Index (RPI) over the same period.

And as consumers face average water bill increases of 5.7 per cent this month(3), one in 10 people (10 per cent) says they would not be able to manage financially if their household bills were to rise further over the next 12 months(2). A further third (36 per cent) say they would only be able to manage by making sacrifices elsewhere(2).

Santander's analysis(1) reveals that the price of gas has almost trebled (up 181 per cent) in the past 10 years. Electricity has doubled (up 109 per cent), while water bills have risen by 64 per cent, and council tax is up by 57 per cent.

By comparison, salaries have risen from £16,964 in 2001 to £21,093 in 2011, according to latest figures from the ONS(4) - an increase of just 24 per cent, while RPI has risen by 38 per cent and household bills have gone up by 71 per cent.

Impact of household bills inflation

Almost eight in 10 Brits (78 per cent) say their life has been impacted in some way in the past year because of rising household bills, including 29 per cent who say the increases have reduced their overall standard of living and 45 per cent who have become more thrifty because of them(2).

The findings(2) show that 85 per cent of Britons have made changes at home in the past year alone to reduce the financial impact of their household bills.

Two-thirds of people (65 per cent) are using their heating less or have started turning it down, and one third (30 per cent) has starting using less water.

One in five people (21 per cent) have reduced or stopped using appliances such as tumble dryers that use a lot of power, and one in 10 (10 per cent) have watched less TV in an effort to reduce their bills. One in five (19 per cent) have made their home more energy-efficient and nine per cent say they have installed a home energy monitor.

Increasing household bills have also forced Brits to take their finances more seriously. Some 17 per cent say they now dedicate more time to reviewing their bills and eight per cent have put more money in emergency savings so when bills come in they can afford to pay them. Around one in seven (14 per cent) people has changed energy supplier and one in 20 (5 per cent) changed bank account in order to get cashback or rewards.

Carlos Palacios, banking director at Santander, said: "Times are tough for a lot of people at the moment and increasing household bills are one of the biggest causes of squeezed consumer finances. People have already been forced to make a number of adjustments to their lifestyle to cope with the hikes, and many will struggle to cope with further increases such as the water bill hikes recently announced.

"There are a number of things people can do to reduce their household bills, from installing home energy monitors to analysing their energy usage or changing their utility suppliers. Our new 123 Current Account can also help make a real difference to people by providing interest on balances and cashback on their everyday bills. It's the only account of its kind available and a completely new way to manage your money and household finances."

Santander has launched a simple to use online calculator which customers can personalise to their own household bills and spending to see how much they could save in a year and how much interest they could earn. We also have a list of all the suppliers you can earn cashback from on our website, www.santander.co.uk/currentaccounts.

Product benefits

New 123 Current Account pays cashback on household direct debits

  • 1% cashback on water and council tax
  • 2% cashback on electricity and gas
  • 3% on mobile, home phone, broadband, and paid-for TV packages

New 123 Current Account also pays in-credit interest

  • 1% AER on the entire balance, once the customer's balance is £1,000 or over
  • 2% AER on the entire balance, once the customer's balance is £2,000 or over
  • 3% AER on the entire balance, once the customer's balance is £3,000 or over (up to £20,000)

The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.

Notes to Editors

(1) Santander analysed Consumer Price Indices data from ONS between February 2002 and February 2012. Categories included in the analysis of 'household bills' are: council tax & rates; water & other charges; electricity; gas; telephones & telemessages; television licences. Inflation of household bills inflation was calculated by weighting the price increases of each category using the ONS family spending report dated 29/11/11.

(2) Opinium surveyed a nationally representative sample of 3,050 UK adults online between 5th and 10th April 2012

(3) OfWat, April 2012 (http://www.thisismoney.co.uk/money/bills/article-2127876/Water-bills-11-cent--despite-ban-hosepipes.html?ito=feeds-newsxml)

(4) ASHE 2001 (www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-54789) and ASHE 2011 (www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/2011-provisional-results--soc-2010-/index.html) - median salaries

The 123 Current Account in detail

Benefits

  • Cashback available on individual direct debits to council tax, water, gas, electricity and communications providers - minimum of two direct debits required, although more direct debits means more cashback
  • In-credit interest paid on total balances once a customer has a balance of more than £1,000 in their account, up to £20,000. Once a customer has the required minimum £1,000 in their account, interest is paid on the total balance from £1. Interest is not paid on balances over £20,000.

Eligibility

  • Open to new and existing customers aged 18 and above (must be UK resident)
  • Minimum monthly funding required: £500
  • Single and joint account options
  • Customers do not need to have another product with Santander to qualify
  • Monthly fee of £2 per account (equates to 6p per day).

Operational features

  • Visa debit cards provided
  • Can be opened and operated online, by phone and in-branch
  • Clear and transparent daily charging structure for overdrafts
  • No switching incentive presently available.

Overdrafts

Santander has reduced the maximum level of fees a customer could be charged per month from £150 on other accounts to £95 for the 123 Current Account, as follows:

  • Arranged overdrafts: £1 per day capped at 20 days in each monthly statement period
  • Unarranged overdrafts: £5 per day. No cap, but all fees on this account are capped at a total of £95 per monthly statement period
  • Paid item fee: £5
  • Unpaid item fee: £10
  • Total monthly fees a customer could pay: all fees on this account will be capped at £95 per monthly statement period.

Customers need to pay in a minimum of £500 a month (also £500 for joint accounts, e.g. £250 per person) and there is a £2 a month fee on the account. Customers also must have a minimum of two direct debits from their account although the more eligible direct debits set up, the greater the cashback paid.

Cashback and any in-credit interest earned are paid monthly on the first statement date after the account is opened, provided the eligibility criteria are met, and the £2 account fee is deducted at the end of each monthly statement period.

Customers need to have a minimum balance of £1,000 to qualify for in-credit interest - this means interest is not earned on balances below £1,000, and interest is paid on balances up to £20,000. No interest is paid over this amount.

About Us

Santander UK plc is a full-service retail and commercial bank providing services to 25 million customers, with more than 1,400 branches and 28 regional business centres. It is a wholly owned subsidiary of Banco Santander. Santander UK plc manages its affairs autonomously, with its own local management team, responsible solely for its performance. Over 85% of the assets on Santander UK plc's balance sheet are UK based and it is subject to full supervision of the Financial Services Authority (FSA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.

Sovereign exposures to Europe (excluding UK) as at September 2011 are not significant at less than 1% of total assets and primarily relate to Swiss government. Total exposure to periphery countries is c. 0.5% of total assets.

Banco Santander (SAN.MC, STD.N, BNC.LN) is a retail and commercial bank, based in Spain, with a presence in 10 main markets. Santander is the largest bank in the euro zone and is among the fifteen in the world by market capitalization. Founded in 1857, Santander had EUR 1.383 trillion in managed funds, more than 102 million customers, 14,760 branches - more than any other international bank - and 193,000 employees at the close of 2011. It is the largest financial group in Spain and Latin America. Furthermore, it has significant positions in the United Kingdom, Portugal, Germany, Poland and the U.S. northeast. Santander Consumer Finance operates in the Group's core markets as well as in the Nordic region. In 2011, Grupo Santander registered EUR 7,021 million in recurring net profit.

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Contact Information

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