EASY WAYS YOU CAN SLASH £900 OFF YOUR BILLS NOW
CONSUMERS are being urged to avoid the so-called “loyalty penalty” that can cost households almost £900 a year in lost interest and higher charges.
Loyal customers are overpaying by £4.1billion a year on mobiles, broadband, home insurance, mortgages and savings, new figures from Citizens Advice show.
By staying put they lose out on £877 a year and this does not even include their fuel bills, which can add hundreds more.
Citizens Advice has submitted a super-complaint urging the Competition and Markets Authority to ensure that loyal customers are treated better. However, do not wait for it to act, show a little disloyalty today. SAVINGS Savers lose on average £48 a year by remaining faithful to the same deposit account, with older savers suffering most.
Some high street banks pay as little as 0.1 per cent but you can get 15 times that amount from the new breed of challenger banks such as Marcus, the online bank from Goldman Sachs.
Managing director Des McDaid said after a decade of low rates, many have stopped shopping around: “It only takes a few minutes to find a better deal.”
Online accounts from challenger banks tend to pay the best rates. Paragon pays 2.26 per cent over two years and Masthaven pays 2.69 per cent over five years (see the best buy table on page 30). CAR INSURANCE Motorists who automatically renew their insurance cover year after year rather than shopping around can pay hundreds of pounds over the odds.
Simon McCulloch, director at CompareTheMarket.com, said the average motor premium is currently £766 but the cheapest policies on the market are £122 less. “The average premium for younger drivers stands at £1,324 but the cheapest is £258 lower,” he said. ENERGY The power giants are hiking bills again, with British Gas and Scottish Power imposing another round of price rises last month. Loyal customers who sit on their supplier’s standard variable tariff for years typically fare worst.
The average Big Six standard variable tariff is now £1,224 a year, up £70 over the last year, said Stephen Murray, energy expert at MoneySupermarket.com.
“To protect yourself from any more price hikes, shop around and switch to a fixed rate tariff to lock in the amount you pay for the next couple of winters. You could save up to £250.” MORTGAGES Homeowners who stay on their lender’s standard variable rate (SVR) can pay hundreds or even thousands over the odds. Ishaan Malhi, chief executive of broker Trussle.com, said two million homeowners are sitting on an SVR, overpaying billions: “Throw off your inertia and hunt around for a better deal.” CREDIT CARDS The average credit card APR is 18.9 per cent for existing customers, while card issuers are battling to offer new customers zero per cent rates on balance transfers and purchases.
Lloyds and Halifax both offer interest-free balance transfers for 34 months, while Sainsbury’s Bank charges zero per cent on purchases for 29 months and Post Office Money for 28 months.
David Black, banking specialist at DJB Research, said: “The best deals are available to those with clean credit records.”
Somebody owing £1,200 at an APR of 18.22 per cent could save around £179 a year by switching the debt to an interest-free card, uSwitch calculates. BROADBAND Households who have reached the end of their broadband and landline contract could save up to £180 a year by switching to a market leading deal, while out of contract mobile customers could make even bigger savings.
Richard Neudegg, head of regulation at uSwitch, said: “If you are paying too much then vote with your feet.”