A new study has revealed what most of us already suspected, but didn’t want to admit; if we made the effort of reviewing our interest rates, utilities providers and bank fees, we could save hundreds (perhaps thousands) of dollars per year.
The report, conducted by the Queensland University of Technology (QUT) on behalf of Heritage Bank confirmed that while 50% of Australians considered switching service providers only 25% of Australians actually took action.
During the past five years, Australians who had looked around for a cheaper option achieved savings of more than $2.5 billion, the report found. The largest savings was from home loans ($649 million), followed by grocery supplier ($593.8 million), energy supplier ($393.9 million), mobile phone provider ($327 million), home and contents insurance ($325 million), credit cards ($152.8 million) and internet provider ($136.5 million).
Those with higher household income were more inclined to switch for a greater saving than those Australian’s earning a lower household income. It was also found that men were more likely to switch providers than women, and that city inhabitants were more included to make a change than their country counterparts. The study also found that older people were less likely to switch than younger generations.
The study also identified that the greatest obstacles to making an adjustment were the perceived effort involved (37 per cent), the perceived costs (36 per cent), the perception that customers receive preferential treatment at their current provider (14 per cent), lack of information on different service providers (13 per cent), and the perception that all providers offer the same conditions (13 per cent).
The idea that it is “too hard” to make a switch could actually be costing you hundreds, perhaps thousands of dollars combined per year. It actually doesn’t require a great deal of effort on your part to examine your options. Here are some suggestions from us:
– Visit a mortgage broker to see whether your current home loan can be improved upon.
– Ask your current home loan provider whether they can offer a better deal on your current product, they often will have a few basis points that they can offer to sweeten the deal.
– There are several websites that act as a type of broker for utilities (i.e. Electricity and Gas). All you need to do is provide your current billing details online and they will phone you to prepare comparative quotes. Often they will facilitate these changes for you.
– The supermarkets are undergoing a price war, and its well worth shopping around for the cheapest price if you are on a tight budget, have a family or simply want a better deal. Often we do go to where it is most convenient for us to shop, but this can be to the detriment of your wallet to the tune of hundreds of dollars per year.
– Don’t forget to check up on your personal insurance, health insurance and superannuation! These industries evolve quite quickly and it certainly pays to check up on your provider. Remember that the cheapest deal is often not the best and you must compare like products, so seeking the advice of an independent financial adviser certainly pays off. They generally have access to all of the insurance and superannuation products in the market, unlike a bank or dealer group aligned adviser who must work from their own product list.
If you have any questions or concerns regarding this, please feel free to contact us on (03) 9999 7200, or you can get in touch online here.
Disclaimer: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements before making any financial decisions.