When George Osborne announced the biggest shake-up of pensions and annuities since their conception, he pointed out that the Budget had been designed for a nation of ‘savers’. The internet has widened the personal finance market: there are more providers of insurance, mortgages, pensions and annuities, credit cards, loans and current accounts than ever. The rise of the comparison site also shows a growing need to shop around to get the most from your money. But are we really accepting the challenge with our finances?
Why shop around?
92% of UK adults actively budget and look for ways to cut costs according to a survey by Standard Life. Over the past year, 42% more under-25s reviewed their utility and phone tariffs on a regular basis and 33% more paid off their credit card each month. 21% more people aged 55+ also regularly set themselves a weekly or a monthly budget to help keep their everyday costs under control. Finance providers and banks are recognising that, in the wake of the financial crisis, we’re all looking to make our money work harder and are increasingly shopping around. It might be therefore worth keeping an eye on the latest deals available as they get more competitive for the ‘compare-and-save’ market.
That said, despite the introduction of the Current Account Switch Service in September 2013, there were only 609,300 switches in the six months to the end of March (out of over 50 million current accounts held in the UK). Under the switching guarantee the new bank or building society is responsible for rearranging all existing payments into the new account. This previously took 30 working days; it now takes just seven. Current account providers - particularly the big banks - are currently under pressure to ease a concentrated market dependent on traditional banking brands. This was behind the separation of TSB and Lloyds earlier this year. Current account deals are also more competitive as providers seek to make the most of a more mobile market, some offering a higher rate of interest or added benefits (some with a monthly charge).
Borrowing and saving
It’s not just current accounts where savings can be made by challenging your financial traditions: if you choose to still take out an annuity, or you’re considering savings accounts, a loan or new mortgage, you could be missing out on a better deal by choosing a brand you’ve used before. There’s a lot to weigh up: you might want to think about more than the rate of interest and any upfront fees or costs when borrowing; you could consider the duration and how the rate may change over time, how regular payments would fit into your everyday spending and affect your ability to do other things with your money, as well as whether or not the provider is trustworthy and well-recommended. The ‘cheapest’ deal may not always be the right one - you should look for one which fits your needs and circumstances.
Knowing where to look
With an abundance of comparison sites at your fingertips and varying quotes, it can be slightly overwhelming to make sure you’ve actually found the right deal. As a rule of thumb, you might want to look at getting financial advice for any investments, pensions and financial planning decisions you’re unsure about. You can also compare current accounts, annuities, mortgages, different forms of insurance, savings accounts and credit cards from across the market in a couple of clicks on our website.