How much money are you wasting on your phone bill?

The National Billmonitor Mobile report released recently makes startling reading. The company, which operates the UK’s only Ofcom-accredited mobile comparison calculator, analysed over 28,000 mobile phone bills and compared them against available contracts within the UK.

As a result of the survey, Billmonitor concluded that 76% of mobile subscribers are on the wrong contracts leading to a total overpayment of just under £5 billion every year. This equates to some £195 per contract per year, a very high proportion when viewed against the average UK mobile bill of £439 per year. Even more shocking this total overpayment equates to around a third of the total mobile bill charges each year.

Whilst the number of phone bills surveyed is only a fraction of the more than 33 million mobile contracts within the UK it is still a larger sample than is used in many surveys in all walks of life. For those with time to read it the survey makes fascinating reading. The top reason given in the report for mobile customers not optimising their bill is a combination of complacency and fear of “bill shock”. This is not surprising as the report includes the passing comment that there are over 8 million different mobile tariffs being used in the UK at present. Whilst some of these undoubtedly relate to contracts linked to specific handsets, it is no wonder that consumers who are thinking of switching are a little at sea over which tariff is best.

When it comes to switching landline contracts the same complacency and fear of “bill shock” reasons come into play. Inertia is a very powerful thing and many companies, including banks, trade on it to attract and keep customers. The perception that it is difficult to switch a telephone contract and that charges on the new contract may not be as advertised is enough to dissuade many people and businesses from switching contracts.

Those that do take the plunge can find themselves with a remarkable reduction in telephone call costs. For example, switching from a standard BT contract to Option Telecom can slash bills by over a third. Those who are able to switch to a VoIP contract can save even more. Thanks to Ofcom regulation changes the switching process is seamless and as it is carried out by the telephone service providers means little or no effort is needed by the telephone user.