The cost of inertia
The cost of inertia
Shopping around for the best deals on your energy tariff, home or motor insurance remains one of the most effective ways that you can save money and combat rising household costs. However, many of you are still failing to seek out a better deal and make valuable savings on your household finances.
The latest study from the Simples Lab looked at what it would take for the nation to look for a more competitive deal across their energy, motor and home insurance bills.
The ‘actively inert’
Just over a third of the nation has switched at least one insurance or energy product in the last twelve months - with motor insurance topping the list, followed by home insurance and finally energy.
Worryingly, these figures mean that the majority of us are continuing to auto-renew at least one of these household bills. We’re labelling this group of the nation as the ‘actively inert’.
What’s the tipping point?
Whilst some of us might be actively inert, we are not a nation against switching. In fact, just a small minority of us have said that there was no amount of money that would convince us to shop around.
The Simples Lab research has found out exactly what the financial saving would need to be to incentivise households to switch – so how much is this ‘tipping point’, and how does it compare to the savings on offer?
The highest ‘tipping point’ was afforded to energy, with the Simples Lab research revealing that we’d be looking for a minimum saving of £99 to switch. The savings required were lower for motor and home insurance, coming in at £66 and £64 respectively.
The savings gap
It’s important for us to point out that the savings available are often far higher than people expect, if they switched.
In fact, motorists who change provider could save an average of £120, much higher than the £66 minimum saving it would take for us to switch. For energy, the savings are even greater; regulator Ofgem calculates that customers who switch from non-competitive standard variable tariffs to a fixed rate can save around £206 – that’s over double the £99 minimum saving it would take to incentivise us to switch For home insurance, we estimate that half of customers could save £95, £31 more than the minimum £64 saving it would take for us to switch.
Overall then, these figures suggest that the savings gap between the overall ‘tipping point’ and the actual savings available comes to a grand total of £192.
The time is right to ditch and switch
With the cost of living continuing to go up, there has never been a more important time for households to overcome inertia. Most of us have admitted to having a tipping point that would push us to take the right steps and look for a more competitive deal but, ironically, we’re also underestimating how much we could save – by almost £200!
With so many costs out of our immediate control, there’s no reason that we should pay over the odds for our energy, motor and home insurance. So, make sure you’re not one of the majority falling foul to consumer inertia – act with your feet and see if you can get a better deal.Read our Cost of Inertia report