Brits waste £243 billion by not changing to more competitive deals
With bank holidays around the corner, many people will be busily contemplating their next home improvements and how to fund them.
Calculations from moneysupermarket.com show a family with a typical basket of financial products1 could save £5,185.852 over a year if they took time out to review their finances and transfer their existing financial products onto more competitive deals, leaving them with more hard-earned cash to splash on themselves.
Stuart Glendinning, managing director at moneysupermarket.com, said: "A family with a typical financial portfolio could save a staggering £5,185.852 over a year by moving away from uncompetitive products.
Simply by reviewing their existing finances - mortgage, credit card, personal loan, savings, home insurance and motor insurance (amongst other things) and searching for better deals they can make considerable savings.
This would take only moments on moneysupermarket.com's website.
"Many people look to make home improvements over the bank holidays weekends and it can end up a costly exercise.
However, sorting out their finances first means they can make some significant savings which could really boost renovation plans." Examples of the savings that can be made: Mortgage With so many low fixed rate mortgages on the market homeowners can reduce their monthly payments considerably by remortgaging to a better deal, especially if they are languishing on the Standard Variable Rate (SVR).
For example, if they move from the Woolwich SVR rate at 7.39 per cent, paying £1,097.78 a month, to a more competitive lender, such as Yorkshire BS, offering 4.79 per cent on a two year fixed rate, they would only pay £869.36 a month.
A saving of £228.42 a month or £2,401.04 a year.
Personal loan Despite a few recent base rate rises, there are still some good deals to be had on personal loans.
There are still six personal loans on the market at less than 6.5 per cent APR.
Based on taking out £7,000 over five years a typical family could save ?168.60 in interest payments in just one year, if they change their personal loan with Lloyds TSB with a typical APR of 10.9 per cent to the Moneyback Bank loan at 6.4 per cent APR5.
Credit card There are still some very competitive 0 per cent deals on both balance transfers and purchases on the market.
Those who make the effort to choose the best deal to suit their needs will be rewarded.
If a £2,000 debt on a Natwest Classic Card at 16.9 per cent APR is switched to one of the 50 credit cards offering 0 per cent interest on balance transfers for the introductory period, such as the Virgin Credit Card (at 0 per cent until for 13 months and 1.2408 per cent per month thereafter), there would be no interest payments in the first year, making an annual saving of ?305.36 including the balance transfer fee.
Motor and home insurance There are some great savings to be made if people make sure their insurance is up to scratch.
By switching motor insurance provider on a Land Rover Freelander S 3Dr from Endsleigh, paying £31.36 a month, to Esure, paying £24.45 a month, they will save £105.95 a year6.
For a four bedroom detached house in St Albans over £135.32 can be saved a year by switching home and contents insurance from a provider such as Legal and General to Budget7.
Savings Savings that languish in poor paying accounts with the 'Big Five' banks could be a costly waste.
An individual with £10,000 in the Royal Bank of Scotland Instant Access Savings account paying 1.85 per cent AER would receive £185.04 in interest over a year.
However, if they swapped to the Alliance and Leicester Direct Saver account paying 5.8 per cent AER, they would earn £579.86 over the same period - an additional earning of £394.82 over the year.
Utilities Utilities have been the talk of the town of late, but customers should assess the deal they are on and not get scared into price protection deals.
For example, Powergen's price protection deal until 2010 would cost, on an average bill8, £1,029.21.
However by transferring onto British Gas Click Energy 2 deal, for the same energy consumption and you would see £265.24 shaved off the average householder's bill.
Other ways people can mop-up their finances is to review other areas such as their current accounts, overdrafts, travel insurance, store cards and new car finance.
Moving these products onto more competitive deals means someone could save a further £1,408.21.2 All these saving equate to a total saving of £5,185.852 in a year.
Stuart continued: "These savings can be made without changing your lifestyle or spending any less - all it costs is a little time to find the best deals for you and your family.
And if you kept these changes up for a year the savings are over £5,000 - enough to persuade the most reluctant saver to make the effort.".
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