FINANCIAL INEQUALITY
Obsessed by Calvin Klein at double the price per 100ml of the male version of the scent.
All is not fair in love either. Supermarket chain Sainsbury’s was admonished earlier this year for charging women in the Midlands 50p extra for a Valentine’s card for their husbands, compared to a virtually identical card aimed at men buying for their wives.
Beyond the high street, a gender imbalance pervades the financial industry.
A report by gender equality charity The Fawcett Society, together with law firm Pinsent Masons, shows women under-invest in their pensions, under-insure themselves relative to men and are more likely to experience poverty in retirement.
This picture is against a backdrop of the gender pay gap which sees most women earn significantly less than men over their working lives.
This gap continues through retirement, with research by consumer group Which? showing that women receive £29,000 less from the state pension than men over the course of a typical 20-year retirement.
WHAT TO DO: There is little women can do about costly toiletries other than develop an immunity to well-branded packaging – and turning to basic yet effective alternatives.
But in the world of financial services women should pay particular attention to their financial futures and get the advice they deserve to secure it.
Visit financial website SavvyWoman for tips and information about a range of subjects and guidance on finding a suitable financial adviser.
THE LOYALTY PENALTY
LONG-STANDING customers subsidise the discounts enjoyed by everyone else. The annual ‘loyalty penalty’ paid by those sticking with the same utility and financial providers each year is nearly £1,000 according to consumer charity Citizens Advice.
The Government’s consultation admits that energy, telecoms and financial firms charge ‘increasingly higher prices’ to customers who have not switched recently.
It adds: ‘The large gap between the best and the worst deals received by consumers is difficult to justify and it is often the vulnerable who suffer disproportionately.’
For example, the difference between the cheapest 12-month fixed-rate gas and electricity tariff and the average dual-fuel deal is £470 a year. Some two million homeowners pay £360 a month extra interest for staying on their mortgage lender’s standard variable rate rather than picking a new deal from another provider.
Half of consumers could save £280 a year by shopping around for car insurance while a quarter could save £113 on buildings and contents insurance.
The Financial Ombudsman Service, which settles disputes between customers and financial firms, has seen a ‘small but significant’ number of complaints where insurance customers are being mistreated for loyalty. Chief executive Caroline Wayman says: ‘People are paying the price for loyalty in a way that is simply not fair.’
WHAT TO DO: Frost says the answer is to ‘ditch and switch’. She adds: ‘When it comes to gas and electricity, sometimes you will not even have to change your supplier to lower your bills. Just move to a cheaper tariff with your current energy company and do not be afraid to haggle. Those who have stayed with one insurer for a long time save the most by switching.’
To compare energy deals try comparison website TheEnergyShop. Websites GoCompare and MoneySuperMarket can help with insurance.
Use a mortgage broker such as London and Country or new online alternatives – including Habito and Trussle – to find a cheaper home loan.
THE OFFLINE TARIFF
MOST British consumers are digitally capable, but there are still millions who lack the confidence to buy goods and services online – or do not want to.
Providers are increasingly focusing on internet consumers, so those paying ‘the offline tariff’ lose out on significant discounts or higher interest for cash deposits.
In the world of energy for example, offline customers pay more to receive paper bills than those who agree to receive digital versions.
The best savings rates are reserved for those opening accounts online, meaning customers take a hit on interest earned if they bank in person, by post or over the phone.
For two, three and five-year fixedrate bonds, only one of the marketleaders allows customers to open an account in person. That is United Bank UK, which has only a handful of branches.
WHAT TO DO: If you cannot beat them join them. Allowing for paperless billing and online account management paves the way for lower bills and higher interest earned.
If you are not happy to do it yourself, rope in a friend or relative to help.
Alternatively, sign up with just one online company that promises to switch deals automatically on your behalf. Flipper or Switchcraft will do this in the energy market.
If the internet really is not an option, contact at least three providers each for energy, insurance or broadband, including your own, and ask for their best offers. In some cases your existing provider may relent to offer a better deal.
For savings, try building societies in your local area which usually have better rates than the banks, even if they are not best-buys.
Lesser-known brands with market leading rates often allow account openings by post or phone. Try Kent Reliance, Hodge Bank, Close Brothers Savings and PCF Bank.