How to slash your phone bills

published 22 September 2009

You've shopped around and got yourself the best deal on your energy bills, banking and loans - but what about your phone? This is one household bill that is easy to cut.

If you don't want to switch provider for example if you are locked into a contract then change how you pay your bills. BT customers can reduce their monthly payments by £2.75 just by switching to paperless billing and paying by direct debit.

Switch for the best deals

But for the best savings you need to be prepared to switch provider. Following price rises by both BT and Talk Talk, line rental with either company now costs £11.25 a month (£14 with BT if you receive paper bills and don't pay by direct debit).

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BT's Unlimited Evening & Weekend Plan gives you free calls to landlines at weekends and evenings for £11.25 a month. TalkTalk's cheapest phone package is £11.25 for free UK landline calls at weekends. But there are far more competitive deals out there.

Primus offers the Primus Home Phone Saver package for just £9.99 including free evening and weekend calls to other landlines. For people who regularly call overseas or mobiles then the Post Office's Home Phone package is attractive. At £11.75 a month you'll pay 50p more than you would pay to BT but you get free evening and weekend calls to landlines, free weekend calls to mobiles and free weekend calls to 40 foreign countries including France, Spain, the United States, Australia and Canada. Just be aware that the free calls are for a maximum of 60 minutes per call, "so if you want to avoid charges you will need to hang up before the hour is up and then redial," warns Melanie Wright in The Daily Telegraph.

To compare the phone deals available to you in your region visit Home Phone Choices.

Cut the cost of individual calls

If you can't switch provider but want to cut the cost of calls abroad or to mobiles then look into using an override providers. By simply dialling a number in front of the phone number you are calling you can override your provider's call charges and pay much less for your phone call.

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For example if you sign up to 18185 then dial 18185 before you call mobiles if you don't get free calls to mobiles as part of your phone plan then you can cut the price of a call from the average 12p a minute down to 6p a minute on weekdays. You can also use this service to make cheap international calls. Using the 18185 prefix would cut the price of a call to Australia down to 1p a minute dial normally with BT and you'd pay a wallet-wrenching 25.70p a minute.

Some providers have got wise to 18185 and have blocked customers from being able to dial the number but you can find the cheapest override provider at MoneySavingExpert's UK call checker or use their International Cheap Calls Checker if you want to make an overseas phone call.

Get a bundle for maximum savings

A great way to you household outgoings is to bundle your telephone, internet and, if you pay for your television services your television.

You can save up to £320 a year with triple bundle deals says Moneysupermarket.com in The Daily Telegraph. For example if you switched from Post Office's 8mbps Broadband Extra costing £20.50 a month, Sky's 2 Mix TV costing £17.50 a month and BT's line rental at £11.25 a month to Sky's triple bundle deal which costs £22.50 a month you'd save £26.75 a month. Unfortunately they've failed to take into account line rental in this calculation but at £11 a month with Sky you'll still save £189 over the year.

Check MoneySupermarket to find the cheapest bundled deal in your area. And bundles could be set to get even cheaper now that Ofcom has allowed BT to bundle its services for the first time. Here's hoping a price war breaks out.

Our recommended article this week:

Five of the best current accounts

There are a range of good current account deals on the market at the moment. And providing you choose wisely, opening a new current account could earn you some extra cash.

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Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.