Paying the price for utility loyalty

Utility3

Citizens Advice has warned that homeowners could be out of pocket by up to £1,000 each year by failing to switch their energy, broadband and insurance providers.

Other sectors where you may be left out of pocket for not changing provider include mobile phones, cash ISA savings accounts and fixed rate mortgages.

The main reason often is a result of providers switching you back to one of their default tariffs, once your original, and cheaper, term with them is complete. Then, human routine sees customers leaving their accounts with the same provider, none the wiser that they aren’t getting the best deal possible.

It is estimated by Citizens Advice that longstanding customers pay £987 more a year in utility bills compared to those who shop around to find the best deals, so putting the feelers out for a new provider is a financial no-brainer.

Here are three of the key areas where you could be making savings on your utility bills and how best to tackle it.

Mobile phone

Arguably the most important tool of modern day living, your mobile phone is your gateway to communicate with the world. Yet with your phone comes a cost – and a potentially high one at that. Those who don’t take out a new deal are said to be paying £22 a month extra, recent research has highlighted.

Once your contract deal runs out, the best piece of advice is to find a new one. It’s near-on guaranteed that you’ll be able to find a better deal than you’re getting even with the same provider (make sure you tell them, or they will keep charging you the same fee for the same deal), but shopping around can put the position of power in your hands. Companies offer deals on everything from free handsets to unlimited texts, so you need to find a deal that’s right for you.

A rule of thumb tends to be the more the pay up front for a new handset, the less the overall contract cost will be. Be sure to haggle with companies to get a deal that you want, and pit them against one another to reduce your overall payments. If you want to reduce costs even more, opt for a SIM-only deal and keep using your old handset.

Energy provider

According to regulatory provider Ofgem, switching your energy bills can save you £300 a year so making a slight change can save you a pretty penny.

You’ve got a choice of providers like British Gas, E.on, EDF, Npower, Scottish Power and SSE, and all of them will claim to give you best deal possible. The best way to find a competitive price often comes through using a price comparison website, such as MoneySuperMarket or uSwitch, as it gives you the chance to put in your exact usage, needs and wants to get the perfect deal.

It is worthwhile checking what the standard rate is for each supplier, and seeing what their cheapest rate is – some companies may only put forward their standard rate. You may find that another supplier has a better standard rate than you’re paying on the cheapest tariff for your current one!

Home insurance

Keeping your home and possessions safe is hugely important, but if anything was to go wrong, having the right cover in place can help ease any worries. However, if you’re paying over the odds for your home insurance, the final payment you get to cover the costs of a smashed window or the damages caused by a leaking pipe may not even touch your monthly premium.

You need to make sure you compare the overall fee and the excess you’ll have to pay in case of an incident that different providers are offering. Making sure you have all the products of the policy that you want and have removed all the ones you don’t want is key to bringing down costs too – if you’re put back on a default policy, these could be loaded back on.

But be careful, getting a policy that’s cheap may not give you the protection you need and send your excess through the roof. 

Keep your energy rates low all year round by finding out how much you can save with a new build house.