Is Inflexibility Costing Millions?

by Guest on July 23, 2012

In the wake of the financial crisis, it’s no surprise that people have been looking to save money wherever possible. For the majority of people this has meant cutting back on a few luxuries and trying to shave a few pennies off day to day costs, whilst a minority have cut costs by accidentally (or intentionally) committing insurance fraud.

The irony is, however, that the easiest ways of saving money at the moment are being blindly ignored by the majority of the population. Recent research suggested that an embarrassing 17% of people have chosen to change financial providers in order to get a better deal.

This means that new entrants to the British financial market are often getting ignored, even though they offer better rates and returns. Take for example bank accounts; the Spanish group are offering extremely competitive rates, on top of additional extras to attract new customers, and yet take up hasn’t been as quick as it should be.

Perhaps, with current interest rates, bank accounts aren’t the best example because interest rates are so low, but things like energy bills, home insurance, or mortgages can represent enormous savings that are being ignored by 83% of the population.

Even worse, there are free deals out there for things like energy efficiency that are being completely ignored due to a combination of lack of awareness and lack of willingness to do something about it. Simple measures that are open to everyone could save over £500 on energy bills, and pay the costs of insulation back in a year.

The irony, of course, is that comparison websites go out of their way to make their advertising ubiquitous. You can’t go anywhere without seeing an advert for MoneySupermarket, or GoCompare, or any of the others, yet, we choose to only use them for things like holiday insurance and other one offs rather than harnessing their considerable power to get cheaper deals on everything.

Quite why Brits are so obstinate when it comes to changing banks is a bit of a mystery, but it’s pretty damaging. Standard practice for most companies who have a captive audience is to slowly raise the price, and that’s exactly what’s happening in all sorts of sectors.

One final figure that’s worthy of your attention is £1,200. That’s the sum of money that the average Britain could save simply changing from their current provider to one of the better ones. Imagine what you could do with over £1,000 extra a year…

About The Author

Jane Evans, a financial Journalist, has been a financial buff for decades. She has published articles in VRL Financial News and Euro Money and is a member of the Financial News Society. She lives in Rumford, Maine, with her husband, three kids and two dogs.

 

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