Gap bills
Question
I'm taking a gap year and I'm looking to move into a house with five others. How much are we likely to be paying for bills per month? As gap year students are we entitled to council tax rebate?
Answer
Your question is a bit like asking how long is a piece of string. The bills you get will depend on how much water, gas, and electricity you use and on the usage of other services such as the telephone or cable TV.
Water can be paid for in two different ways: either a lump sum determined by the rateable value of the property; or by meter. With five of you in the house the former would be cheaper, but if you have a meter the water company will be reluctant to change back to rateable value.
With all the utilities being private companies there is more competition to sell you services and therefore there are significant differences in price. There are various websites where you can compare prices. One of these is Uswitch that gives information on all utilities and other services such as digital TV suppliers, telephone, etc. You might also want to check out the Up My Street website that can help you estimate your bills more accurately.
When it comes to your TV, you will need a TV licence, and in certain circumstances you may need one each, though this is unlikely in a normal shared house. Other television services or internet connections will obviously increase costs as well. www.ADSLguide.org.uk provides information on different services and their charges.
Depending on your circumstances, you may be able to claim Housing Benefit/Local Housing Allowance but this will be restricted to the single room rate for anyone under 25.
Once you are 18 and not currently in higher education, you will be required to pay Council Tax which will depend on the band your home falls into. For example, in 2008-09 the average annual council tax in England for a band D property is £1,374. Be very careful with Council Tax, who ever amongst you is liable could be prosecuted in the event of non payment of the total due. Make sure it is clear to all your house mates how much they will be expected to contribute. Again depending on your circumstances you may be able to claim Council Tax Benefit.
Will your home have a washing machine? If not, factor in the costs for washing and tumble drying per load at the local laundrette. You may want to consider insuring your home contents, e.g. computer, DVD player, etc. As you are in a house with others this could be expensive, if indeed you can get cover.
Don't forget travel costs to and from work. Investigate the savings possible with travel cards or young person discounts. Don't rule out cycling or walking which could be cheap, practical alternatives.
You may also want to factor in your budget the costs of new clothes, toiletries, cleaning materials for the house and last but not least food. If you want to cut your bills in this area, eat as a group and cook proper meals rather than buying convenience foods or take-aways. Consider buying your fresh food from smaller shops as veg and meat can be cheaper and better quality than in the larger supermarkets.
The www.i-resign.com website has both a handy salary calculator and budget checker, which can help you decide if you're able to afford the cost of living in your planned shared house.
With regards going out, try drawing up a budget on a weekly basis. Try to avoid buying on credit, but if you have to, try to make sure you can afford to pay it all off at the end of the month. By just paying off the minimum, you can end up paying huge amounts in interest. With careful budgeting, you can avoid running up debts before you start university.
For comprehensive information on managing your personal finances visit the money section of TheSite.org.
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Question answered by CAB
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