Average Bill Pay Customer Over-paying by £200

At one point or another we’ve all looked at our phone bill and thought, "There is no way I am getting the best value from this crowd," and it seems we may have been right. According to a new study by mathematical group Billmonitor, 76 percent of people in the UK are overpaying on their phone service by an average of £194.71 per year.

Billmonitor based its report on the analysis of 28,417 anonymised mobile phone bills. The useage of these customers was then compared to 8,530,118 mobile phone contracts available in the UK in March 2011. With more than three quarters of mobile phone users over-estimating or under-estimating their needs, the total figure for money wasted by being on the wrong contracts is £4.899 billion.

Though more than half (52 percent) of us are said to be over-estimating how many minutes or texts we need, 29 percent of those on the wrong contract are on a tariff that’s too small. What’s costing them money are the charges on out-of-allowance calls, texts and data usage.

Interesteingly, Billmonitor reports that while 82 percent of post-pay customers spend on chargeable services outside of allowance, only 32 percent spend more than £5 a month. The top 5 percent (1.35 million subscribers), however, are responsible for half of the the £3.47 billion that’s spent on overages each year.

One final aspect of Billmonitor’s study should hit home with those that have upgraded to a smartphone in the last year or so. The group reports that the average mobile data use is now at 133MB per month, but that the top five percent of users have begun to exceed the stand 500MB allowance on offer and the top one percent uses over 1.5GBs. The fact that people find it so hard to gauge their data needs, coupled with the fact that some networks correlate data allowance with minutes allowance, means the problem of people over-estimating their needs will be even further exaggerated.

For Billmonitor’s full study, click through to the group’s website.

(via BBC)

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  • Anonymous
    This comes as no surprise. The people who overestimate their talk/text needs have done to themselves what utility companies do to customers. In the case of utilities they set direct debit payment slightly too high so you overpay and they get to keep your money until the end of the year.
  • duffymoon
    I wonder if this report takes into account the free phone upgrades?