MILLIONS of us are paying more than we need on our everyday bills.
Comparison site MoneySuperMarket.com wants to help people save £1BILLION by shopping around for the best deals for things such as car insurance and broadband.
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But making those savings means switching our mindset as well as our money.
Here, Mel Hunter busts eight common myths that stand in people’s way.
- All figures are from MoneySuperMarket.com unless stated otherwise.
Myth 1: Now is not the time to shop around or compare prices
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FACT: Just because energy savings are almost impossible to come by at the moment, it doesn’t mean you cannot switch and save on other things.
From hefty bills such as car insurance to smaller amounts such as pet cover, now is the time to shop around to balance out the cost of those punishing energy prices.
Jo Thornhill, money expert at MoneySuperMarket, says: “Take your time to sit down and go through everything.
“If it feels daunting, focus on a couple of key areas.
“Use a comparison site to get as much information as you can. You might be pleasantly surprised by how much you can save.
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“Once you have a quote you can go back to your existing provider and they may match it.
“Without that knowledge, you are powerless.”
Myth 2: Summer is the wrong season to make energy savings
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FACT: When the weather is warm, it’s the perfect time to work out how you can spend less on your energy next winter.
Taking action, such as plugging draughty gaps, hanging thicker curtains (check what’s on sale at local charity shops) and increasing the amount of insulation in your loft, will all add up to savings when the nights start drawing in again.
Switch your bulbs over to LED versions, which use 75 per cent less energy.
If your boiler is old, stretching your budget to get a new A-rated one now could reduce your yearly energy bills by more than £200, according to the Energy Saving Trust.
And you are more likely to find deals on new boilers at this time of year.
Myth 3: There’s no point switching banks, and it’s a hassle
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FACT: Competition for your custom is high among different banks, leading to them offering lots of incentives for switching accounts.
Switch to one well-known High Street bank right now and you could get a cashback “golden hello” worth £170.
But don’t make a decision just because of the headline perks. Scour the small print to find the best account for you.
If you tend to dip into your overdraft, find one with low fees for doing that.
Be aware that many of the switching offers require a minimum amount to be paid into the account each month.
Thanks to the Current Account Switch Guarantee, moving to a new bank is simple. All direct debits and standing orders will be transferred for you.
The service carried out almost 200,000 switches in the first three months of this year – up 41 per cent on the same period in 2021.
As interest rates creep up, keep an eye on savings accounts to see if you could max the value of a rainy day fund – if you’re lucky enough to have one.
Myth 4: There’s nothing you can do to change your credit score
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FACT: Don’t panic if your credit score is not where you would like it to be – simple measures can boost it.
A few easy steps, such as registering on the electoral roll, keeping up with bills and closing credit accounts you do not need any more should see your score climb.
Having a good score could help you make big savings in the long term, giving you a much better chance of getting a good rate on things like loans, mortgages and credit cards.
You can check your score for free with MoneySuperMarket’s Credit Monitor service, as well as with other companies such as ClearScore.
Credit reference agencies Equifax, Experian and Trans-Union also give you access to your score, often through a free trial – though you may have to pay a fee for the full service.
Myth 5: No matter which firm you use, you pay the same for car cover
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FACT: Comparing car insurance quotes and switching to the best deal could mean hundreds of pounds extra in your bank account.
Despite this simple way to save cash, more than half of drivers let their car insurance auto-renew last year, despite the premium going up by an average of £49.
A quarter shopped around but stayed with the same provider for ease while one in five did not believe there were significant savings to be made by switching.
Sara Newell, a car insurance expert at MoneySuperMarket, urged drivers to check their renewal documents, where the previous year’s price must be included alongside the renewal price.
Even if there is little change, you should still shop around with other providers to see if you can land a better deal.
Sara says: “Some people report getting the best deals on car insurance around three to four weeks before their renewal date. Leave it too late, and quotes are likely to rise as the renewal date gets nearer.”
Myth 6: You should always avoid credit cards like the plague
FACT: Credit cards can help but should definitely be treated with care.
More than six in ten UK credit card holders currently have an outstanding balance, with the average amount owed being close to £800.
With standard cards, it’s crucial to pay off the balance in full each month.
Low or zero-rate balance transfer cards are a good option for those looking to clear their debt, though you may have to pay to move the balance over.
They are usually only an option if you have a good credit rating.
You can use an online credit card calculator to work out how much you could save by switching to a card with a lower interest rate.
Money expert Jo Thornhill says: “By transferring an existing card balance to a 0% rate card you could also avoid paying interest for up to two years.
“You must pay it off by the end of your interest-free period though, or you will end up paying much higher interest.
“Other credit cards come with benefits, such as a reward card to build up points through your everyday spending.
“But it’s essential to pay your bills off every month to avoid a higher interest rate and making a dent in your credit score.”
Myth 7: It’s ok to leave buying travel insurance to the last minute
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FACT: Taking out insurance a day or two before you jet off may seem like a smart move, but you’ll lose out if you need to cancel your trip before that.
If someone in your family falls ill and you can’t go on your holiday, you won’t be covered if you haven’t yet got a policy in place.
More than six in ten leave it until the week before travel to take out insurance, but those in the know say it pays to take it out as soon as you book.
“Don’t buy it from the holiday provider,” says Jo.
“Do your own research to find cheaper cover and a policy that fits your needs.”
More than a quarter of us are thought to head off on holiday without taking out any insurance at all.
But the smart money says that with cover starting from around a tenner for a week’s getaway, you’d be mad not to protect yourself.
Myth 8: If you’re happy with your broadband provider, don’t risk switching
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FACT: Broadband is so essential to our lives that many people fear switching. But no matter how satisfied you are with your service, that satisfaction might be trumped by the savings offered by changing provider.
Jo says: “This is one of those overlooked areas, but you could save quite a significant amount.
“If you stick with the same provider, you are more likely to experience prices rising a little every year – which could add up to a lot. Check whether or not it is cheaper to have a bundle deal with your phone, broadband and TV package all included.
“Sometimes it may cost less to go for a standalone broadband package and then get your TV in a different way.”
But be warned – many broadband providers include in their terms that they can increase your monthly bill by a certain amount, generally linked to inflation, and often with a bit extra on top.
Jo says: “With inflation on the up, your bills could be heading the same way.”
HOW MUCH COULD YOU SAVE IF YOU COMPARED PRICES?
YOU could be quids in by comparing prices . . .
- Half of households could save up to £301 on their combined annual car insurance premiums.
- There are savings of up to £186 to be had by switching an average broadband bill for the cheapest superfast deal.
- Switching a £2,000 balance from a high-interest credit card could help you save an extra £327 a year.
- Households could save up to £156 on their home insurance.
- Choosing the right pet insurance policies could save you up to £200 a year.
See MoneySuperMarket.com for full details of savings and the samples they are based on.
