15 Oct 2019 Almost a third (29%) of UK adults spend an average of £120 a year paying for unwanted policies, subscriptions, and memberships that they haven’t cancelled, according to new research by online bank Marcus by Goldman Sachs. Online subscription services (32%) are the most frequently forgotten subscriptions and policies to cancel, followed by gym memberships (26%) and magazine subscriptions (20%).
The research found millennials are the most forgetful, with 45% of 18 to 34-year olds confessing that they’ve failed to cancel services, at an average estimated cost of £232 over 12 months. This compares to 30% of people aged 35-54 who spend £53 more than necessary a year, and 16% of over 55s who only miss out on £7 a year.
Typically, forgetfulness (61%), confusing cancellation processes (30%) and laziness (22%) are the reasons we keep these memberships going, with more than a quarter (27%) doing so for more than four months before we cancel them. Potentially contributing to the effect, over two thirds (68%) pay for these services through direct debit.
This inaction has had a direct financial impact on more than nearly three fifths (58%) of adults, which jumps up to 70% of millennials. As a result, more than one in ten (12%) of the same 18-34 age group are being forced into their overdraft to pay for things they no longer use and almost a quarter (24%) are not able to save as much as they wanted that month.
Of those that have overspent in this way, half claim that simpler cancellation processes would encourage them to end unwanted policies or subscriptions in the future, and 28% simply require more personal admin time.
Managing Director of Marcus by Goldman Sachs, Des McDaid, said: “Many of us have stories of how we’ve taken out a subscription or policy and have forgotten to cancel it, but when it adds up over time, this can have a negative impact on our finances and savings goals.
“Before taking out subscriptions, remember to check the cancellation policy carefully and if necessary, set a reminder after a short period of time, or once the free trial is up, to make sure you are still happy to pay for it.
“It’s also worth noting down your subscription and policy costs on your phone or in an app, this will help you keep on track of what you’re paying for and manage your monthly budget with a realistic view of your outgoings. Wasting £100 can soon turn into £1,000 if you’re not careful, so doing little things like this can really help in the long term.”
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