How to handle bills when living in accommodation where utility charges are not included
The second year at university is often when students first face the responsibility of paying bills. This can be daunting, and some young people struggle to keep a close eye on their outgoing payments. A recent survey conducted by online student bill-sharing tool Split The Bills found that:
- a quarter (24.3%) of young people never check how much their bills cost
- more than one in 10 (12.8%) didn’t know the cost of their bills because somebody else pays them
Being in denial about your bank balance means you could easily go into debt. To prevent this from happening, it’s important you get organised and create a system for paying bills.
Utility bills explained - Utility bills are the basic services that keep your student home running. These are usually paid in monthly instalments and include the following:
- Broadband—although prices vary, some reports say this costs an average of £16.90 per month.
- Electricity—in the UK, this costs £49 per month, according to the Money Advice Service.
- Gas—this costs around £48 per month.
- TV licence—this costs £150.50 a year. You need a licence to watch BBC iPlayer and any basic TV or Freeview channels. However, as a student, you might be eligible for a partial refund for the months you aren’t living in the house.
- TV subscription package (e.g. Sky, Virgin)—if you have enough room in your budget for this, the prices tend to start from around £20 a month.
- Water—it’s estimated that the average price for water and sewerage bills is £33 per month, but this can vary depending on location. It’s common for water bills to be included in monthly rent payments for student accommodation.
What you should prioritise
To avoid being charged for the energy the previous tenants used, you’ll need to take readings from your gas and electricity meters as soon as you move into the house. The meters are usually outside the property, or in the basement or cellar. Take a note of the numbers you see from left to right, excluding any red numbers or dials.
Ashley Tate, chief executive officer at Split The Bills, said: “If the previous tenants have any unpaid bills, your landlord or estate agency should keep their contact details on file. That way, you can refer the energy suppliers to them to avoid getting charged for other people’s debt.”
Once you know which company provides your electricity, you and your housemates must register with them as soon as possible. You’ll then need to give them the meter readings.
Not all homes have a gas connection. If yours does, you may want to set up a dual-fuel tariff with one energy supplier as this can save you money.
If you decide to find new suppliers, comparison sites can be the best way to make sure you choose a suitable provider within your budget.
Hayley Cheshire, office manager at Fit Property, said: “When sorting bills, be very careful of cheap deals as it’s likely you’ll be underpaying every month only to get stung with a large bill at the end of the year.
“Look out for long contracts and exit fees. Most of the best deals may seem cheap to begin with but you could be tied in for 18–24 months. If you’re only living there for 9–12 months, make sure you know what the early cancellation and exit fees are.
“Before moving in, it’s important to get your broadband sorted. It can take from two to three weeks to get it installed, especially during the busy period when everyone is moving into their new student houses.”
Full-time students are exempt from paying any council tax, but this doesn’t happen automatically. To avoid being hit with an unexpected charge, register as a ‘disregarded person’ with your local council.
Create a plan of action
You can set up a joint account to pay the bills, so everyone is aware of all costs. However, if anyone already has a poor credit history or the account goes overdrawn, this could affect all account holders’ credit scores.
Ashley continued: “It’s imperative you discuss bills with your housemates and agree on a way to pay the bills responsibly. Otherwise, some tenants might end up paying more than others, they could be overcharged, or payments could be made late.”
Or, you may choose to send your share of the utility bills to one housemate, who would then have the responsibility of paying the providers. However, this can easily create tension if that person has to chase housemates to pay their fair share of the bills, or if they don’t pay the bills on time.
“If you’re struggling with the idea of paying bills for the first time, rent an all-inclusive property or use a bill-splitting company. Bills are complicated and can be very stressful,” Hayley said.
Bill-splitting companies can be a suitable alternative as they divide all costs into one monthly payment per tenant, which takes away a lot of the pressure. However, you’ll need to make sure you have enough money in your budget to cover the service charge.
“It’s important you don’t ignore your bills and that you sort them out as soon as possible. They won’t go away so the sooner you get organised, the better,” Ashley added.
A previous survey found that 42% of students’ relationships suffer because of money problems. To avoid any heated arguments arising down the line, you should all monitor your individual bank statements. That way, you make sure you can afford the utility costs and that you don’t eat into your budget by buying items you don’t need.
A Bit About Our Contributor: Acasa At Acasa we know that living with other people sucks sometimes. But it doesn't have to. We want it to be brilliant. We hate awkward conversations about money and the stress it causes flatmates. Home isn’t just about the house - it’s about the people. We want Splittable to foster happiness in the home, making you a smarter, more effective and less stressed housemate. Our own house sharing experiences have shaped how we approach things, and we try to operate with the same values that we think make for happier houses.
Acasa is the easiest way to track and split expenses with the people you live with.