The biggest way you're losing money

by Rachel Wait on 30 June 2011  |  7 comments
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Failing to switch to a better deal could mean you're losing £1,200 a year!

No one likes to waste money. And yet recent research has revealed that many of us are losing money by failing to do one simple thing – switch to a better deal.

In fact, according to a study by MyVoucherCodes.co.uk, the majority of British homeowners and renters haven’t reviewed their utility providers to check if they are getting the best rates possible.

And the reason for this? Well, a quarter of people said they hadn’t even thought about it, 22% said they had been meaning to get around to it, 17% said it was just too much hassle, 9% said they were happy with their current rates, and 3% said they didn’t know there were other options.

Get saving

Taking the time to shop around and switch to a better deal doesn’t have to be complicated and it really could be worth the money! After all, there is absolutely no point paying more for something than you need to – just because you can’t be bothered to switch.

So let’s take a closer look at the type of deals you should be switching and how much money you could wasting if you don’t bother.

Gas and electricity

OK, so summer might finally be here, but that doesn’t mean you shouldn’t give your gas and electricity bills any consideration. After all, Scottish Power recently announced price hikes which are due to come into effect on 1 August. And it’s expected that other gas and electricity suppliers will soon follow suit.

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As a result, you don’t want to be stuck forking out more than you need to - especially come winter. So take a look at what tariff you’re currently on and then shop around for a better one. It’s really easy to do with our gas and electricity comparison tool and you can save an average of £256 a year!

All you need to do is check the name of your tariff, how much you spent on energy in the last year, how you currently pay for your energy (ie. direct debit or prepayment) and your postcode. You can then enter your details into the tool and see whether there’s a cheaper deal out there for you.

It’s worth noting that paying by direct debit generally works out to be cheaper, as does opting for a dual fuel tariff, where both your gas and electricity come from the same supplier. And you should save even more money if you choose an online tariff.

Take a look at this step-by-step guide to switching for more information.

Total saving: £256

Broadband

Broadband can be yet another expensive bill to pay. However, there are ways to keep the costs to a minimum. The most obvious one is to use a comparison service such as broadbandchoices.co.uk to see whether there’s a better deal.

Always check the terms and conditions of your contract carefully before you switch, however, to ensure you won’t get caught out by cancellation fees. And make sure you keep an eye out for hidden costs in your new package before you sign on the dotted line.

It’s also worth considering a broadband bundle – this means bundling up your broadband, digital TV and home services with one provider. By doing so, you could save around £300 a year! You’d be mad to miss out!

Total saving: £300

Mobile phone

Switching your mobile phone deal once your current contract comes to an end is also well worth it. After all, do you really use all of those minutes and texts each month? If you don’t, you’re simply throwing money down the drain. In fact, you could be wasting as much as £200 a year!

So take the time to shop around and have a look at sites such as Recombu that allow you to hunt out the best tariff for you depending on your own personal requirements. It’s also worth giving SIM only deals some thought if you’re happy with your current phone. Read The best SIM only mobile deals for more information.

Insurance

No one likes paying for insurance. But whether it’s car insurance or home insurance, next time it’s up for renewal, don’t simply accept the renewal quote. Have a shop around first and switch providers if you find a better deal.

Loyal customers usually get the worst deals, with renewal quotes being more expensive than quotes offered to new customers.

As we revealed in this article, by shopping around, you could be saving around £337 on your car insurance and around £130 on your home insurance!

Fabulous savings

In total, by switching to a better deal, you’ll have now saved yourself around £1,223! Why would you want to waste that?

However, there are also a couple of other deals you can switch to ensure your money is going even further.

Current account

Firstly, get a better current account. Whether you regularly stay in the black, or you frequently dip into the red, you could be losing money if you’re not using the right current account.

For example, the Santander Preferred Current Account pays an interest rate of 5% on balances up to £2,500 for 12 months! That’s better than most savings accounts are paying these days and it means you could be earning a bit of extra cash for simply making the effort to switch accounts.

The Santander Preferred Current Account is also a great account if you regularly use your overdraft because you’ll receive a free overdraft for 12 months! Why pay out interest and fees for using your overdraft if you don’t have to?

What’s more, you’ll also receive £100 cash for switching to this account. Just bear in mind you need to have at least two direct debits or standing orders set up on the account and you need to pay in at least £1,000 a month.

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The major downside to this account, however, is the fact that Santander is not renowned for its good customer service. So another current account worth considering is the Halifax Reward Current Account which pays £5 a month, whether you’re in credit or overdrawn! Again, you’ll need to pay in £1,000 a month.

Savings account

Finally, once you’ve made these savings, it’s time to find a good home for them. Don’t leave your savings dwindling in an account that’s earning you no interest. Instead, switch to a savings account that’ll earn you a bit of extra money.

For example, the best easy access savings account on the market right now is the Coventry BS Poppy Online Saver Account which offers an interest rate of 3.10%, including a bonus of 1.10% for 12 months. Be warned that you can only make four penalty-free withdrawals per year.

And if you’re not convinced it’s worth taking the time to switch, the good news is that savings rates are now at their highest levels in two years! So it is well worth doing!

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