Do you pay for Spotify Premium? How about Amazon Prime, Disney+, or Netflix? Maybe you have a habit of buying a new outfit every time you have a special occasion, using your ASOS Premier account to ensure you get it delivered the very next day?
There are countless subscription services available for anything you could ever dream of these days, from gym memberships to food boxes, making it a safe bet that you have at least one monthly subscription that you pay without a second thought.
But have you ever stopped to think about how much these services are costing you each year – particularly the ones that you’ve forgotten about or rarely use?
With record breaking inflation levels and costs of living skyrocketing, it’s safe to assume that you’re probably looking for ways to save some extra pennies wherever you can – and cancelling any subscriptions you don’t use could be a good place to start.
So, how much is the average person paying on subscriptions and how much could they save by getting rid of any they don’t use or have forgotten about? Here’s what our research found.
What is the average cost of subscriptions per month?
According to the latest stats from Finder, Brits spend more than £2 billion on subscriptions per year1, while research from Barclaycard shows that at the end of 2021, Brits spent £620 annually (or £51.66 per month) on subscription services.
And despite people spending less time at home last year due to lockdown being lifted, it doesn’t appear that everyone is swapping nights in watching Netflix for cinema dates. In fact, the average amount spent on subscriptions actually went up by 12% compared to the previous 12 months.2
In terms of which subscriptions are most popular, our research found unsurprisingly that video streaming services came out on top, with almost half (47%) of UK adults admitting that they pay out for at least one of these each month.3
The cost of forgotten subscriptions
Subscription services are often worth the money if you benefit from them, but how much money are you wasting by paying for ones you don’t use?
Well, according to our research, the average Brit spends £9.90 a month on subscriptions they rarely use or don’t use at all. That’s £118.80 each year!
We also found that 19.3% of Brits think the reason they’re paying for subscriptions they don’t use is because they forgot to cancel the free trial, they read the terms and conditions incorrectly, or they simply didn’t read them at all.
Since this research was conducted at the end of 2021, Netflix customers have actually seen their prices increase. The costs of their basic and standard subscription plans have gone up by £1 a month, while their premium plan has gone up by an extra £2 per month.4
Even more recently, Amazon announced they were upping their prices in Europe due to higher operating costs. For its subscribers in the UK, this has meant that the cost of their monthly subscription will increase by £1 a month from September, while annual membership will increase by a total of £16.5
If you’re in a comfortable financial situation or you use these services regularly, this might not seem like a big deal. But with costs continuing to rise with no end in sight, and the value of our savings gradually being eaten away by inflation, you could put this cash to better use .
What could you do to save money on subscription services?
Putting aside some time to look over your bank statements and taking note of the subscription services you pay for (or any transactions you don’t immediately recognise) could give you a better idea of where your money’s going and how you could cut costs.
As part of this, you might want to consider how much value you’re getting out of each subscription. If there are any you don’t use, then you might be to cancel them if your contract allows (but don’t forget to check if you’ll be charged cancellation fees).
For any who can’t cancel right now, another option could be to switch off any annual auto-renewals or set a reminder to cancel the subscription once your contract ends.
Another option for subscriptions you rarely use could be to downgrade your plan to a cheaper version or keep track of how often you really use them and see if you think it’s worth it.
Then once you’ve assessed the subscription services you pay for, here are some things you could do with the money you could save going forward:
Build an emergency fund if you don’t already have one
If you’re worried about your finances, one thing that could ease your mind is by building up an emergency fund with the intention for it to be used for – you guessed it – emergencies.
This would be for events like your boiler breaking and needing to be replaced, or you or your partner losing your job unexpectedly.
It’s typically recommended that an emergency savings pot covers at least 3 to 6 months’ worth of outgoings and that this money is kept in an account that’s easy to access.
Give your money more potential to grow by investing it
Investing might sound like the last thing you want to do during a cost of living crisis, right? After all, there is always the risk that you’ll lose your money as the value of investments can go up and down unexpectedly – and you can’t predict when financial markets will rise or fall.
However, one thing to consider is that any money in your bank account could also be losing value in real time if the interest rate is lower than the rate of inflation. So, if you already have an emergency fund and there’s some money left over, you could give it more potential to grow by investing as any gains you make won’t be tied to fixed interest rates.
Plus, data shows that those who invested in the FTSE 100 –which are the 100 largest publicly listed companies in the UK - for any 10-year period since 1984 have had an 89% chance of making a positive return on their investment.6
Investing is easier than you might think. With robo-investing services like Wealthify, you don’t have to invest large amounts. Just pay in as much or as little as you like as and when it suits you, or you could replace the cost of your subscriptions with a monthly Direct Debit for the same amount – moving from wasting that money to investing it instead.
However, do remember that with investing your capital is at risk, and you could get back less than you put in. Whatever works for you.
Our investment experts will make all the investing decisions, keeping an eye on all the various factors that impact financial markets so they can make changes to your Plan to help keep your investments on track. And you can check your performance at any time online or via our handy app too. So, why not find out more about what we do?
Wealthify does not offer advice, if you’re not sure whether investing is right for you, then please speak to a financial adviser.
With investing your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.
Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.
References:
1. https://www.finder.com/uk/subscription-service-statistics
2. https://home.barclaycard/press-releases/2021/08/subscription-society-surges/
3. Research conducted on behalf of Wealthify by Opinium Research amongst 2,000 UK adults between 17th and 21st December.
4. https://inews.co.uk/culture/television/netflix-price-rise-explained-how-much-subscriptions-going-up-when-increase-1640080
5. https://www.bbc.co.uk/news/business-62297014
6. Data from Bloomberg
