UK consumers can save more than £2,500 a year by taking control of their finances, new analysis from Experian reveals.
Families overpaying on their mortgages and energy bills, and those paying interest on their credit cards can cut their costs by switching to a better deal. Experian has launched Money Matters Week to help consumers take control of their finances and have a greater awareness of the money they could save on their household bills.
Currently, homeowners could find themselves overpaying by around £1,8001 annually if they fail to re-mortgage when their introductory offer ends and they slip onto their providers’ Standard Variable Rate (SVR) deal.
Of those who ended up on their providers’ Standard Variable Rate (SVR), 29%2 did so as they thought re-mortgaging was too much hassle or too complicated, while 28% admitted they didn’t realise that moving onto SVR could lead to higher repayments.
Another fifth (19%) said they had tried to re-mortgage but were unable to do so because of stricter borrowing criteria. Overall, only 6% had switched their mortgage provider in the last year.
Meanwhile, nearly two thirds of households (62%) haven’t switched energy providers in the past 12 months, meaning they could be overpaying by as much as £255 a year3 on average.
Switching energy provider is most popular with those aged 25-34 (37%), compared to just 29% of 55+ year olds who have changed in the past year, suggesting older people are more reluctant to switch. Some 15% of the 55+ category also said they didn’t trust the smaller – and often cheaper – energy firms, compared to just 7% in the 25-34 group.
People can also cut their costs by transferring their existing credit card balance to a 0% balance transfer card. Typical cardholders who don’t switch will be incurring interest of £4684 on their credit card balance. However, nearly a fifth (19%) are incurring interest on their current card, with just 10% transferring a balance in the past year to avoid paying interest. When asked why they had not switched, 23% said they were unable to due to having a low credit score, while 18% said they felt the process of switching was too complicated, and 16% said they didn’t know what the benefits were.
Managing Director of Experian Marketplace and Affinity, Amir Goshtai, said: “While many households are looking to make savings where they can on their monthly bills, too many are still over-overpaying when they don’t need to.
“That’s why we have launched Money Matters Week, to bring some focus and practical tips to help people review their bills and make some savings.
“I urge homeowners to make sure they know when their introductory offer is coming to an end and see what their re-mortgaging options are. Switching energy companies is a simple process and there are many ways to avoid paying interest on credit cards.”