Over half of British broadband customers are wasting hundreds of pounds a year by paying for a broadband package that exceeds their needs, a survey has revealed.

'Unlimited' packages are becoming increasingly popular as customers seek the freedom to stream and download music and video to their heart's content, but the figures show that many users are barely scratching the surface of their download limits.

Research by broadband comparison site Broadbandchoices.co.uk shows that 53% of internet users with an unlimited usage monthly download package only download 10GB or less of data per month while 74% use 20GB or less of their allowance - meaning that they are essentially paying for a service they don't need.

For example BT Broadband's Unlimited package costs £24.99 per month while the package with a 10GB usage limit costs just £15.99. So many customers are potentially wasting over £100 a year.

Broadbandchoices.co.uk is urging people to think realistically about their needs as a broadband user. Those who only use the internet to check email and browse sites, and don't stream or download much media, probably only need a basic service.

Michael Phillips, product director of Broadbandchoices.co.uk said: "When choosing a broadband package it is easy to become distracted by flash marketing and words like 'unlimited' or to be scared by the concept of download penalties. Our survey shows that the vast majority of broadband users spend less than 2 hours a week on each activity such as downloading music; watching video clips; or watching and downloading TV programmes and movies.

"Consumers who pay for a service they are not making full use of are in effect throwing money down the drain. Broadband customers should shop around for a deal to suit their usage needs using an Ofcom accredited price comparison site - those who do could save themselves £100 a year or more."