Monday 25 September 2017

How shopping around could save you up to €500 a year

Charlie Weston Personal Finance Editor

HOUSEHOLDERS are missing out of savings of up to €500 a year by failing to seek out the best value for services, a government agency has found.

New research shows that tiny numbers of consumers are switching health insurance, bank accounts and television service providers.

The National Consumer Agency, which commissioned the research, said people who move to a different health insurer could save €500 a year.

Those who switched energy provider can save up to €240 a year, while big savings can be made from moving waste service provider and telephone service operator.

Consumers have been accused of inertia – doing nothing and ending up paying higher prices. Just four out of every 100 have switched bank accounts in the past year, despite both AIB and Bank of Ireland introducing new charges and fees for current accounts.

And fewer than one in 10 consumers has changed health insurance provider, even though there are now four players in the market and premiums have gone up by between 10pc and 27pc in the past year.

And small numbers have moved to get a better deal on mobile phone services and broadband.

Head of the National Consumer Agency Karen O'Leary hailed the fact that one in four consumers had now changed where they do their main grocery shopping.

High numbers moved to a different car insurer.

However, only around 16 out of 100 consumers have moved their electricity and gas accounts to a different company.

This is despite the fact that annual gas prices will have risen by €250 in past two years when a new Bord Gais hike in prices comes into effect in October.

Ms O'Leary added: "More consumers are aware that shopping around and switching providers can save them money.

INERTIA

"However, there is still a large level of inertia, with large numbers of consumers sticking with the same provider.

"This is surprising given the pressures on people's income and the fact that the majority of those who switched did, in fact, save money."

Many consumers still view switching as a hassle, the head of the National Consumer Agency said.

There was a big risk that householders were not making fully informed decisions by checking out all the prices in the market.

Large numbers of people who have not switched have never checked to see if a better deal is available.

The research, carried out by Behaviour and Attitudes, found that almost half of those who have not switched gas provider had never checked to see if a better deal was on offer.

And high numbers of householders have not checked out competitor prices to see if they could get cheaper electricity and telephone landline services.

Consumers reported that one of the biggest barriers to switching was a belief that that moving provider is more hassle than it is worth, but a belief that there is not much of a price difference between providers was another strong factor.

Other barriers included a distrust of the price offered and a difficulty in comparing prices.

Ms O'Leary added: "Switching may not be as difficult as you think. In recent years it has become a much simpler process in many sectors so it shouldn't take long to see if you can get a better deal and switch if it's worth your while."

She added that staying with the same provider was not in itself a bad thing, providing you made the decision on an informed basis.

Irish Independent

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