27-Jul-2010
Nearly one third of us have not changed our home phone provider in over 5 years and are pouring money down the drain as a result. As we all increasingly rely on mobiles for the majority of our calls, the humble home phone is often overlooked as a key area for saving on your household bills.
Indeed, recent research by Ofcom accredited home phone, broadband and digital TV comparison service Simplifydigital.co.uk, shows that 20% of their customers save over 570 GBP per year by switching to better deals - and 10% save more than 750 GBP per year. And a large chunk of these savings come from huge reductions on home phone calls.
As a rule of thumb, if you have not reviewed your home phone calls plan in the last 18 months you are likely to be wasting money, and the third of homes who have not reviewed their home phone plans in the last 5 years are wasting big money.
Home phone costs consist of the line rental (paid monthly) and the cost of the call plan on top. There is not much variation in the cost of line rental, which varies from about 10 GBP to 11.99 GBP per month. But there are big differences in the cost of the calls between suppliers, so here are some important things to watch out for when looking for a better home phone deal.
Top 5 things for watch out for when choosing a home phone service
1. Match your household's call habits to the right call plan. For example, if you tend to make calls during the day, make sure that you are on an inclusive daytime call plan. You would be amazed at how many households have not checked to see which call plan they are on.
2. Costs to mobiles can be a killer. And costs to the 3 mobile network are especially high for some providers (e.g. Virgin Media's standard rate calls to mobiles is 18.95p per minute, relative to 30.95p per minute for calls to 3 mobile). So check the rates your provider offers.
3. Packages that come with free calls - e.g. "free evening and weekend calls" - have a fair usage policy which means that you will start getting charged for the calls after 60 minutes of conversation. The trick is to hang up and dial again.
4. Companies often charge about 1 GBP/month for paper billing and if you don't pay by direct debit you will get penalised to the tune of about 4 GBP per quarter. So opt for online billing and pay by direct debit.
5. And the biggest 'watch out' of all. If you also have a broadband or digital TV service, think about bundling your services with your home phone. People who buy their services from separate providers on average pay considerably more. TalkTalk for example offer "free" broadband with their basic home phone service and Sky offer free evening and weekend calls with their basic TV service.
To show the size of the potential home phone savings, let's take the example of a family which has not reviewed their home phone bills in a long time. They have Sky TV and regularly make calls during the day, as well as regular calls to mobiles. If this is the case, there are immediately big savings to be had by getting a call plan with inclusive daytime calls, to avoid paying through the nose during the day.
For example, BT's basic "Unlimited Weekend Plan" charges 5.9p per minute for daytime calls, so a family spending 20 minutes on the phone per day to landlines will be spending 23.60 GBP per month on national calls alone. If for example they were spending another 20 minutes per day on calls to mobiles (which BT charge at 12.5p per minute), this would add up to another 50 GBP per month, making a total of 74 GBP per month excluding line rental! If they were to switch to an anytime call plan there would be big savings, as we show below.
Sky Talk Unlimited (5 GBP per month for Sky TV customers) - This package is only available for Sky TV customers. It is very good value and gives you unlimited free national daytime calls, plus free calls to 20 international destinations including France and the US. And importantly calls to mobiles would be just 10p per minute. So instead of paying 74 GBP per month, the family would pay a total of 45 GBP per month (excluding line rental) and benefit from the free international calls - making a saving of about 29 GBP per month or 348 GBP per year.
TalkTalk UK Anytime - The TalkTalk package is another great value plan. For 5.49 GBP per month you get free daytime, evening and weekend calls. Calls to mobiles are 12p per minute and you also pay for calls to international destinations. But on this basis you would still expect to save about 258 GBP per year (21.51 GBP per month).
BT Unlimited Anytime Plan - Moving to this plan would not involve switching from BT. It costs 4.99 GBP per month (with the first 3 months free) for free daytime, evening and weekend calls. Calls to mobile cost 12.5p per minute and BT's standard international call charges apply. But by switching to this plan, the family would still save 20.30 GBP per month or 244 GBP per year. A major drawback of the BT package is that it ropes you in to a 12-month "renewable contract" which automatically gets extended to an additional twelve months, after the completion of the initial 12.
Skype - The family might also consider a Voice over Internet Protocol (VoIP) service like Skype. They offer big opportunities to save, but require a broadband connection (as the calls go over the internet). Skype offers free calls to other Skype users wherever they are in the world and also offer a package of free calls to domestic landlines anytime for 4.58 GBP per month. And unlimited calls to landlines in over 40 countries worldwide for 9.18 GBP per month.
In summary, if you have not reviewed your home phone package in a while it is definitely worth digging out the bills, checking what call plan you are on, and seeing if you can save!
We've teamed up with impartial comparison site Simplifydigital to offer you free and impartial advice to find the best deal. Simply call 0800 280 0149 or click here to compare deals online. Our experts will help you to find the best-fit package for the biggest saving.
Information correct at 27th July 2010
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