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8 ways cutting costs could backfire including £80k blunder if you 'tick the wrong box'

ended 30. July 2025

Consumers and businesses could lose thousands through cost-cutting shortcuts, experts have warned.

Cheap insurance, skipping property surveys, doing your own HR as a business or arranging your own mortgage are all methods that could backfire spectacularly.

One expert says a client, from Leicester, lost an astonishing £80,000…simply by ticking the wrong box.

Pensions

Scott Gallacher, Director at Rowley Turton, said: "Cutting costs by skipping financial advice can be a false economy. 

"One DIY client ticked the wrong box when accessing his pension and lost £200,000 of tax-free cash – an £80,000 tax hit. 

"This was a few years ago. He had an old occupational scheme but transferred benefit not as a ‘wind up’ or ‘buddy transfer’, and lost scheme-specific tax free cash entitlement and was then limited to 25%.

"Another refused to pay our £500 fee for help encashing an offshore bond, only to lose £1,500 in unnecessary tax. 

"Retiring without advice can mean missing out on enhanced annuities – costing up to 10% of your retirement income for the sake of 1% in fees. 

"Clients also regularly overpay on mortgages by not using a broker, or stick with poor-value pensions and investments with high fees. 

"The cost of advice is often dwarfed by the long-term value it adds – or the disasters it prevents."

Property surveys and mortgage apathy

Another temptation might be to skip a property market survey. But this could be another way of losing thousands of pounds.

Babek Ismayil, Founder of OneDome, said: "There are countless ways to make short-cuts in the property market but too often they can backfire. 

"Not having a full survey, as it is seen as an unnecessary expense, is one area where there are countless horror stories involving subsidence and other structural issues. 

"Another example of people taking shortcuts is sticking with their existing lender as it's seen as the easiest and quickest option when their mortgage rate comes to an end. 

"It may be less time-intensive but it could cost you thousands of pounds in the years ahead if a much better rate was available elsewhere. On that front, think long-term and speak to a broker. 

"The process doesn't have to take any longer than a remortgage with your existing lender and you are reassured that they have scanned the whole of the market."

Cheap insurance 

There's nothing wrong with looking around for the best insurance deal, but consuemrs must be wary of cheap insurance packages that actually cover very little.

Tony Redondo, Founder of Cosmos Currency Exchange, said: "Shortcuts often lead to bigger bills. Skimpy insurance policies may not cover damages, leaving you to pay big out-of-pocket costs. 

"Mistakes like improper tax filings or mishandling employee disputes can lead to fines, lawsuits, or high turnover, which are far costlier than professional HR services. 

"Outsourcing overseas can lead to communication and quality control issues that impact customer service and lead to poor customer satisfaction and retention. Cheap doesn’t last, needing costly and frequent replacements."

Mortgages, car maintanence, accountancy and managing property

The simple truth is cutting corners on just about anything that is available as a professional service carries its own cost, in the long-run.

Michelle Lawson, Director at Lawson Financial, added:

"Generally cutting anything where a professional service is on offer will end up costing more. 

"The financial race to the bottom now means people do cut corners and often regret it later. 

"Many examples exist for this such as people attempting their own car maintenance, accountancy, managing property, arranging your own mortgage, using comparison sites for insurance. 

"All of these are cheap shortcuts initially until it goes wrong often at a time you need it the most. 

"You get what you pay for in using someone's well earned knowledge and expertise as well as the tools that the individual has to do the their job and provide invaluable support and guidance. 

"Everyone will have a story but very few learn a lesson."

DIY HR 

If you're a small business, particularly if you're starting new, it may be tempting to do the HR yourself. But this could backfire in ruinous fashion.

Kate Underwood, Managing Director/HR Director at Kate Underwood HR and Training, said: 

"Cutting HR corners might seem like a money-saver, but it often costs more in the long run. 

"Handling things yourself can lead to costly mistakes – like a mishandled dismissal or a missing contract, landing you in legal trouble.

"Skipping staff surveys means you miss early signs of disengagement, and losing good people is expensive. 

"Rushed or cheap hires without proper support often don’t last, meaning more time and money are spent recruiting again.

“And without clear HR policies? You’re wide open when things go wrong. Good HR isn’t just a nice-to-have – it’s your safety net. It protects your business, supports your team, and helps you sleep at night.”

7 responses from the Newspage community

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Editor
Babek Ismayil
CEO at homebuying platform OneDome
There are countless ways to make short-cuts in the property market but too often they can backfire. Not having a full survey, as it is seen as an unnecessary expense, is one area where there are countless horror stories involving subsidence and other structural issues. Another example of people taking shortcuts is sticking with their existing lender as it's seen as the easiest and quickest option when their mortgage rate comes to an end. It may be less time-intensive but it could cost you thousands of pounds in the years ahead if a much better rate was available elsewhere. On that front, think long-term and speak to a broker. The process doesn't have to take any longer than a remortgage with your existing lender and you are reassured that they have scanned the whole of the market.
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Editor
Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
One of the most common false economies we see is buyers skipping a proper property survey to save a few hundred pounds on their home purchase. But it can end up costing thousands if issues like damp, structural problems, or Japanese knotweed come to light after completion. In a market where every penny counts, it’s understandable to want to cut costs, but avoiding due diligence on the biggest purchase of your life can be a very expensive mistake.
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Editor
Scott Gallacher
Director at Rowley Turton
Cutting costs by skipping financial advice can be a false economy. One DIY client ticked the wrong box when accessing his pension and lost £200,000 of tax-free cash—an £80,000 tax hit. Another refused to pay our £500 fee for help encashing an offshore bond, only to lose £1,500 in unnecessary tax. Retiring without advice can mean missing out on enhanced annuities—costing up to 10% of your retirement income for the sake of 1% in fees. Clients also regularly overpay on mortgages by not using a broker, or stick with poor-value pensions and investments with high fees. The cost of advice is often dwarfed by the long-term value it adds—or the disasters it prevents.
Copy

Editor
Tony Redondo
Founder at Cosmos Currency Exchange
Shortcuts often lead to bigger bills. Skimpy insurance policies may not cover damages, leaving you to pay big out-of-pocket costs. Mistakes like improper tax filings or mishandling employee disputes can lead to fines, lawsuits, or high turnover, which are far costlier than professional HR services. Outsourcing overseas can lead to communication and quality control issues that impact customer service and lead to poor customer satisfaction and retention. Cheap doesn’t last, needing costly and frequent replacements.
Copy

Editor
Michelle Lawson
Director at Lawson Financial
Generally cutting anything where a professional service is on offer will end up costing more. The financial race to the bottom now means people do cut corners and often regret it later. Many examples exist for this such as people attempting their own car maintenance, accountancy, managing property, arranging your own mortgage, using comparison sites for insurance. All of these are cheap shortcuts initially until it goes wrong often at a time you need it the most. You get what you pay for in using someone's well earned knowledge and expertise as well as the tools that the individual has to do the their job and provide invaluable support and guidance. Everyone will have a story but very few learn a lesson.
Copy

Editor
Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
Cutting HR corners might seem like a money-saver, but it often costs more in the long run. Handling things yourself can lead to costly mistakes – like a mishandled dismissal or a missing contract, landing you in legal trouble.

Skipping staff surveys means you miss early signs of disengagement, and losing good people is expensive. Rushed or cheap hires without proper support often don’t last, meaning more time and money are spent recruiting again.

And without clear HR policies? You’re wide open when things go wrong.

Good HR isn’t just a nice-to-have – it’s your safety net. It protects your business, supports your team, and helps you sleep at night.
Copy

Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
As a landlord, I see these problems constantly. A cheap boiler saves money for a single financial quarter before it fails, costing far more in emergency repairs and reputational damage. From skipping a building survey on a house purchase to opting for flimsy flat pack furniture, you are deferring costs, not eliminating them.

That cheap washing machine or budget insurance policy is designed to look like a saving, but it is engineered to cost you more in the long run. When the flimsy appliance breaks down just out of warranty, or the insurer presents you with a mountain of exclusions after an accident, the true and painful price becomes clear.

Similarly, treating professional services like legal advice as discretionary is a catastrophic false economy. The owner-manager business owner who eschews HR support to save a few hundred pounds is exposing their entire enterprise to a five-figure tribunal claim. The true cost of an item or service is its price plus the risk of its failure.