There are many everyday things that people are forced to pay more for if they’re poor.
Did you know if you’re in the lower bracket of earners, the chances are you’re paying more for many everyday products than higher earners?
The less wealthy amongst us are losing out on the best deals and paying a premium for products simply as a result of their income - or lack of it.
Indeed, as the examples below show, from milk to mortgages, if you’ve not got the cash to spend in the short term you could find yourself paying over the odds.
Supermarket shops
If you’ve got the money to spend a little more at the supermarket, you can actually make a decent saving.
Bulk buys and special offers are usually targeted towards encouraging shoppers to pay extra - with the promise that they’re getting better value in return.
If you can’t afford to do so, however, you end up missing out.
Take Tesco’s Luxury Soft Toilet Tissue, for instance.
For a four-roll pack you’ll pay £1.75 - or 44p a roll. Pay £8 for a 24 pack though and you’ll pay just 33p per roll, 11p less.
For a 1.43kg box of Fairy Non-Bio Washing Powder at Sainsbury’s you’ll pay £6, which works out at £4.20 per kg.
However, if you can afford the 4.225kg box at £9 you’ll actually be paying £2.13kg.
The same applies for Asda’s semi skimmed milk. Two pints will set you back 75p, equating to 66.4p a litre, but buy the 6-pint carton for £1.30 and you’re paying just 38.1p a litre.
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Insurance
[SPOTLIGHT] Your income is likely to impact the area in which you live and the area in which you live can also leave you out of pocket - particularly when it comes to insurance.
Insurers price by risk and areas of deprivation are deemed more risky.
According to the ONS, five out of the ten most deprived towns and cities in the UK are based in the North West.
Latest figures from the AA show car insurance premiums for the region are the highest in the UK, costing £788.25 on average.
By contrast, average premiums in the South East region cost just £476.56.
Make sure you're not overpaying for car insurance
Mortgages
Getting on the housing ladder can be an expensive business all round, but if you’re not as well off as some more cash rich buyers it’s going to cost you quite a bit more.
The cheapest mortgage rates are offered to borrowers who are able to put down the biggest deposits.
So if you can’t afford to pay a sizeable chunk upfront you’re going to pay more in the long run.
As an example, with a 5% deposit Yorkshire Building Society can offer you a mortgage at 3.48% fixed for two years. If you borrowed £150,000 over 25 years, that would mean monthly repayments of around £760.
If you can put down a 25% deposit, however, you can access Yorkshire’s two year fixed rate at 1.28%, which would see your monthly repayments on a £150,000 loan plummet to £584.
Search for a cheaper mortgage today
Bank accounts
The very best bank accounts are reserved for those people willing to deposit the most money with perks like airport lounge access and uncapped interest on offer to the super wealthy.
But even modest extras can come at price.
First Direct’s 1st account, for example, offers £250 interest free overdraft facility and cashback when you switch but to access it you must be depositing at least £1,000 per month.
Nationwide’s Flex Direct account comes with no fee on an arranged overdraft for first 12 months but again only if you can put in £1,000 a month.
Meanwhile rewards accounts such as Santander’s 123 account comes with monthly cashback on selected household bills and 3% AER (variable) payable on your entire balance.
But it’ll cost you £5 per month, you must be depositing at least £500 a month and you only get the 3% interest once you’ve got £3,000 in the account.
Find the right current account for your needs
Electricity & gas
Whilst it may sounds inconceivable that a utility provider could charge someone more for electricity when they’re struggling financially, this does actually happen.
Many families who are on a low wage or are in debt with their fuel provider have a prepayment meter installed.
Charity Save the Children estimates that 13% of UK households pay for their gas, electricity or both using a prepayment meter.
The metres are supposed to help families to budget and manage costs but the charity says the tariffs charged for these meters are actually more expensive than those available via direct debit or online.
Indeed, Save the Children’s research reveals families with a prepayment meter could be as much as £250 a year better off if they were offered the same tariff as those families who pay by direct debit.
Don't get ripped off: search for the cheapest energy deal in you area
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