Seven ways to shave thousands off the cost of living

The Government’s £21billion package to help households cope with soaring energy bills, unveiled on Thursday by Chancellor Rishi Sunak, has received widespread approval. 

Yet it won’t bring instant financial relief, especially to many pensioners reliant on the state pension and those struggling on low incomes. 

Most of the measures, such as the £400 discount on energy bills and one-off payments (£300) to pensioner households, will not kick in until this autumn at the earliest. 

It’s time to remortgage to a deal where the rate is fixed. The quicker, the better, I say.

So it’s essential that you remain on the front foot by identifying ways of saving money. 

Here are seven steps you can take NOW to cut your costs – without becoming hermits and forgoing some of life’s pleasures, such as going out for a meal or seeing a movie. 


Interest rates are only going one way this year and next – and that is up. So if you have a home loan where the interest rate is variable, it’s time to remortgage to a deal where the rate is fixed. The quicker, the better, I say.

By fixing, you will lock down probably one of your biggest monthly household expenses, giving you financial certainty in an uncertain world.

The fixed rate you secure will depend on the amount of equity in your home. 

The more you have, the better the rate. It will also depend on how long you want to fix for.

By way of example, someone with a £150,000 repayment home loan on a variable rate will be paying about 4.34 per cent interest – resulting in an overall monthly payment of just over £820. 

Taking out an average priced five-year fixed-rate deal, the monthly payment will fall to just under £670 – an annual saving of more than £1,800.

For those on an existing fixed-rate home loan where the deal has less than six months to go, you can book a new fixed rate now to kick in when the current one expires. 

A shrewd move, given that mortgage prices are rising all the time.

Brokers such as L&C Mortgages (a This is Money partner) will do the hard work for you.


Cancel those direct debits for services and products you no longer use. Households spend an average £500 a year on subscriptions. 

So if there are TV streaming services, gym memberships, magazine or food subscription services you are not getting good use out of, now is the time to ditch them – or to make a note to ditch them ahead of renewal.

So trawl through your bank statements and credit-card bills to remind yourself of everything you are paying for. 

Make sure you terminate your subscription with the provider before cancelling any direct debits, otherwise this can be treated as a payment default and impair your credit score.


Santander’s 123 Lite Account will pay 3% cashback on household bills. There is a £2 monthly fee and you must log in to mobile or online banking at least once every 3 months, deposit £500 per month and hold two direct debits to qualify.


Virgin Money’s M Plus Account offers £20,000 Virgin Points to spend via Virgin Red when you switch and pays 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 must be paid into a linked easy-access account paying 1% interest and 2 direct debits transferred over.


HSBC’s Advance Account pays £170 when you switch to the account. You need to set up two direct debits or standing orders and pay in at least £1,500 into the account within the first 60 days.


First Direct will give newcomers £150 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in at least £1,000 within three months of opening the account.


Nationwide’s FlexDirect account comes with up to £125 cash incentive for new and existing customers. Plus 2% interest on up to £1,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both the latter perks last for a year.


Selling your unused items can give them new life and you  some extra cash

Selling your unused items can give them new life and you  some extra cash


The average household has £400 of unused junk lying around their homes or sitting in a spare room or attic. A source of ready income.

Internet auction websites such as eBay provide a marketplace for almost everything.

Do not be greedy with the prices you set and always include details of damage or faults. 

For eBay, you do not need to pay a listing fee but you will typically pay 12.8 per cent of the final cost, including postage, plus a 30p charge.

How to turn your trash into treasure 

When you start selling items in the home, you might get the bug. In their book, Never Go Broke, This is Money deputy editor Lee Boyce and star of TV’s Storage Hunters, Jesse McClure.

Want to make extra money? This is Money deputy editor Lee Boyce's book with Jesse McClure, Never Go Broke could help

Want to make extra money? This is Money deputy editor Lee Boyce’s book with Jesse McClure, Never Go Broke could help

They have three steps to success:

Step one is building a resale pot from nowhere: selling items from your home, making cash from trash and using your talents for side hustles, among other things. 

Step two involves a resale blueprint from Jesse’s 20-plus years’ experience of buying and selling.

Step three lays out practical places to use your resale pot and how to reinvest it for further gains. 

Jesse says: ‘We all have a ‘collecting net worth’. That is, items we have accumulated over the years we no longer need. 

‘Sell multimedia you no longer use. Dig out those old video games and consoles. Assume everything you have has value.

‘I use a simple tier system. Real good quality items in tier one I’ll sell to specialists, auction houses or antiques dealers. Tier two – which makes up the bulk of what people have in their homes – should be sold online.

‘If your tier two items aren’t selling (I’d set a time limit so you can clear it out), tier three is a car boot sale. The bottom tier is essentially recycling value.’

If you’re new to selling items around the home, start small and don’t try to list everything. Make it part of your day and aim to make £50 or so a week in the beginning.

Starting slow will allow you to see which items sell fast, how to list them quickly but well and it will make it less of a chore. In fact, it should be fun, selling unwanted items and watching the coffers fill.

Some quick tips for selling items online are getting keywords right, choosing the correct listing category, taking clear photographs and making sure you’re pricing right.

A great place to get started is Facebook Marketplace (read Lee Boyce’s 12 top tips for selling on Facebook).

There’s no harm in listing items on various websites to try and attract the best bidder, for example, clothes with good labels on specialist ones. 

Times are tough. Resale could help keep your head above water. It can be incredibly fun too. 

>Listen to a This is Money podcast special with the Never Go Broke authors: How to build up a cash pot and sell your way to profits


Putting your foot down hard on the accelerator is a gas-guzzler. But driving smoothly in a high gear while sticking within the speed limit can knock 25 per cent off your fuel bill, saving £318 a year in petrol or £420 in diesel.

You can also cut fuel costs by making sure your tyres are at the right pressure, turning off the air conditioning and losing extra weight by emptying the boot of stuff you don’t need to carry around.

Download the PetrolPrices mobile app, which will help you find the cheapest stations where you can fill up. It can save you £10 on the cost of a full tank.

Supermarkets tend to offer the lowest prices while motorway service stations are the most expensive, so avoid them like the plague.


When food shopping, swap premium-brand goods for cheaper, own-brand ones. 

They’re often made by the same manufacturers but can cost up to 50 per cent less. Sometimes the own brands are positioned on the lower shelves and can be easily missed.

Do take advantage of any vouchers that retailers offer you as a regular shopper, although you will probably have to download the store’s app to take advantage.

Loyalty cards from Tesco, Sainsbury’s and Boots are worth their weight in gold. Also, shops will discount perishable goods – by up to 75 per cent – on the day their use-by-date expires.

If you prefer to shop online, websites such as TopCashback and Quidco will reward you with free money when you are shopping online. TopCashback says its members make £345 a year on average.

Before making a purchase online, check whether they feature on your cashback website. If so, click through from that site first, and the cashback will be paid later.


When a broadband, mobile phone or insurance (motor or home) deal comes up for renewal, providers rarely offer their customers the most competitive price.

It’s easy to shop around for a cheaper deal using a price-comparison website, and switching is usually painless. 

But if you want to stay with your existing provider, phone and ask them to give you an improved offer, quoting the deal offered by the comparison website.

Shop around for a cheaper deals on bills using a price-comparison website, and switch if your usual provider fails to offer a competitive rate

Shop around for a cheaper deals on bills using a price-comparison website, and switch if your usual provider fails to offer a competitive rate

More often than not, they will suddenly come up with a better deal to keep your custom.


If you have an arranged overdraft with your bank – or you are not clearing your credit-card balance on a regular basis – don’t bury your head in the sand.

Take action because overdrafts and credit-card debts can attract fierce rates of interest.

Unsecured personal loans are an option. According to Moneyfacts, a £5,000 personal loan from M&S Bank, payable over five years, will cost 3.9 per cent in interest charges.