I recently became reacquainted with my “bills drawer”. At Casa James, this happens to be the bottom drawer of a chest where I exile all of my financial paperwork: the reminders, contracts and policy documents. Typically, my good intentions of keeping my alternative filing system tidy and efficient went out of the window every time I found that I was busy (which is, let’s face it, most of the time). The tidy out happened after I spent a long and frustrating hour hunting for my most recent insurance renewal documents, mild swearing and lots of huffing throughout.
In recent years, the drawer has become more neglected because businesses and Government organisations have nudged – or in some cases, forced – us online. No longer do bank statements and utility bills land on the doormat to remind us that we need to sort out what we owe. This means that we are far more likely to be unaware of what we are being charged for certain contracts – or if they are even correct.
My greatest concern is the digitisation of wage slips. Here’s a question – when did you last check yours? Can you remember how to log in to your work’s payroll system? Do you know how much tax you are paying or what your pension contributions are?
I put these questions to a range of friends and colleagues over the past week and in almost all cases, they didn’t know.
And this is the danger of digitisation. By moving vital information online, we become more and more disconnected from it, like how much tax we pay and how much we are putting aside for retirement.
Employers must give you a payslip by law, but this can be paper, via an email or – in most cases – available through an online system. (There are exceptions to the slip rule, like the self-employed, or people in the armed forces, for example).
And then there is the fact that getting a pay slip is one thing, but understanding it is quite another. Explaining your slip is rather complex, so hurrah for the Advisory, Conciliation and Arbitration Service (ACAS) which has a great guide. While you’re at it, find out more about the tax you are actually paying this financial year.
But let’s be honest, if you haven’t seen your wage slip for a while, chances are you won’t be asking these questions. That’s why I believe vital information like that contained within wage slips should still be provided in paper form. Going online to find information requires motivation and puts the obligation on you to remember to do so. Getting a paper slip puts the obligation on your employer to keep you better informed.
Of course, there are good environmental reasons for not issuing paper wage slips and bills – though I would point out that recycling has come on leaps and bounds in recent years. There are other things employers can do to ensure that you have checked your wage slips. For example, you could be required to check you wage slip online each month and confirm online that you have done so. It’s notable that this option isn’t that common.
Realistically digitisation only really benefits businesses. Because the less likely you are to scrutinise things, then the less likely you are to complain or be dissatisfied. And that’s even more acute when it comes to businesses that we have contracts with.
The wholesale price of energy sparked the biggest affordability crisis in recent memory. However, it did force many of us online to finally check our bills. Many, many people were horrified with what they found.
Leaving aside the affordability of energy over the past year, the sector has been relying on estimated readings for a big chunk of the pandemic. Yet before both of these events the regulator was reporting over a million errors with energy switching alone. So it goes without saying that scrutinising a bill can be beneficial when businesses get things wrong. To give you just one example, lots of people have contacted me to complain that their meter readings have been ignored by their energy provider. This would seem to be because the businesses computer systems have decided that it’s more likely that their estimates are correct versus your actual readings. This, of course, is wrong.
I’m of the opinion that there are potentially millions of errors with energy bills alone out there. Yet the fact that your bill is online means you may not be aware of problems with how you own energy provider is calculating yours.
And it’s not just errors that paper bills alert us to. Did you know that you can subscribe to regular payments through your mobile phone bill, just like a bank account? While this might be a convenient way to pay for some things, it also means that you could end up paying for a subscription service that you might not have wanted or agreed to.
Oh and insurance companies may send you out policy information, but many of the detailed terms and conditions might be lurking through online only links – and disputes over T&Cs are among the most common when it comes to claims.
Though I wouldn’t advocate going back to paper bills for everything, the fact remains we are more likely to respond to an item of post than we are to an online account with a complex log in and a password we have forgotten. If paper wage slips and bills are part of the past, then businesses and employers must do much more to ensure that we are regularly checking these vital documents online – and allow us to appeal or complain about anything that doesn’t make sense.
Martyn James is a personal finance commentator and journalist