CHESTER, England, December 19, 2011 /PRNewswire/ --
- Reviewing your finances for 2012 could mean an extra £3,200* in your pocket
Brits could give themselves a New Year pay rise in 2012 by taking time to review their finances and switching to more competitive deals, analysis from MoneySupermarket.com has shown.
Kevin Mountford, head of banking of MoneySupermarket.com, said: "2011 has been an uphill struggle as increased winter fuel bills and the rising cost of living has taken its toll on many families. As the cost of Christmas kicks in, many households will be hitting their financial tipping point, with research showing** a fifth of Brits will be pushed further into debt with the cost of Christmas.
"It is imperative that consumers try and fight back, and do as much as they can to sort out their finances by, setting resolutions for themselves as we head into 2012.
"Despite the current economic climate, many Brits still make the mistake of sitting on average products which provide a low return or cost far more than they need to. Significant savings can be made by switching to a better deal and you may find it could be the best resolution you have ever made. These savings don't even require a change of lifestyle, but simply a few minutes of research to check what deal you are currently being offered, compare it to other products and change to a more competitive deal if necessary. With the nation's purse strings tightening throughout 2011, the opportunity to put some money back in your wallet must be welcomed."
Mortgages are the biggest single financial commitment that consumers make so homeowners should ensure they are getting the best deal possible - even a small difference in rate can greatly affect the overall monthly mortgage payment. Switching a £150,000 mortgage from the average standard variable rate (SVR) of 4.83 per cent to the current market leading two year tracker rate from first direct at 2.08 per cent would save £1,207.84 annually.
Savers had a tough year in 2011 with continuous low interest rates and high inflation giving little return on their money. Switching from an easy account paying the average rate of 1.08 per cent to Nationwide's MySave Issue 4 easy access account offering 3.12 per cent could generate an extra £102 in interest based on a savings pot of £5,000.
Recent research from MoneySupermarket found that the personal loan market saw average rates for loans between £7,500 and £15,000 hit their lowest levels in four years in November, so for consumers looking to borrow over £7,500 it pays to shop around. Swapping a £7,500 five year loan at an average rate of 15.41 per cent to the first direct loan at 6.8 cent would generate an annual saving of £325.40.
Switching your current account provider to one that pays a good rate of interest could earn you some additional cash. The Santander Preferred current account pays interest of 5 per cent on credit balances. Keeping a £1,500 balance in this account for 12 months would earn £65.25 in interest. However, if you use an overdraft every month, you could save £292.50 by switching from an account with an average overdraft rate of 19.5 per cent to the Santander Preferred Current Account at 0 per cent for 12 months.
With many Brits carrying over debt from Christmas spending into the New Year they should ensure they get the best deal with a balance transfer card. By switching £2,000 worth of debt on a card with an average APR of 18.4 per cent to the market leading 22 months Barclaycard Platinum, there would be no interest to pay in the first year. This would amount to an annual saving of £263.27 taking into account the balance transfer fee.
Car and home insurance
Insurance is essential for financial security and ensuring a peace of mind, but consumers should shop around for the best value cover that suits their needs. It doesn't have to break the bank, and following a few simple tips, could help shave pounds off your yearly outgoings. For example, many people make the mistake of over-estimating the level of cover needed on their home and end up forking out extra as a result. Similarly, paying annually for your home insurance will be cheaper than paying monthly, and adding a partner or, if you are a younger motorist, adding an older driver to your car insurance policy can also help cut costs.
By scouring the market to find the most competitive policies available, people will find there are some great savings to be made. On average, consumers who use MoneySupermarket.com to switch their insurance provider can save £383.22 on car insurance and £125.59 on home insurance a combined saving of £508.81.
Saving money on your energy bills can be easily achieved by searching the market and checking you are on the right tariff for your consumption level and region is crucial. The easiest way to make savings is to move to a dual fuel online direct debit deal. By switching to the best online tariff instead of staying on the average standard QCC tariff, customers could save on average £256.25 over 12 months with First Utility iSave 9.
There are also simple steps to take to reduce consumption and cut down energy bills, for example turning down the thermostat by 1°C can cut your annual bill by ten per cent. Similarly, loft and cavity wall insulation can save up to 35 per cent of heat loss and the initial costs involved in the set-up process will soon pay for themselves in the savings to bills. Turning appliances off at the wall instead of leaving them on stand-by mode will also help to reduce costs.
TV, phone and internet
Opting for a packaged bundle including your TV, landline and broadband together can result in big savings, for example, Sky provides a TV Variety Pack which includes broadband, line rental and a basic TV package, with unlimited evening and weekend calls. By combining products, customers could save on average £125.40 over the year. It is also important to review your subscriptions annually and scour the market to ensure you're still getting the best deal.
Notes to editors:
Please find below saving comparison tables across a range of commonly used products with leading provider versus average:
Loans - £7,000 over 5 years
Best Rate Average Rate Annual Saving first direct 6.8% 15.41% GBP8,237 over the term GBP9,864 over the term GBP325.40
Savings - £5,000 (Easy Access)
Best Rate Average Rate Annual Saving Nationwide BS MySave Issue 4 3.12% (including bonus of 1.58% for 12 1.08% months) GBP54 interest for GBP156 interest for the year the year GBP102.00
Savings - £250 a month (Regular Saver)
Best Rate Average Rate Annual Saving Principality BS Christmas Regular Saver 2.44% Bond 5.01% GBP39.65 interest GBP41.76 GBP81.41 interest for the year for the year
Credit Card - £2,000 balance transfer
Best Rate Average Rate Annual Saving 18.40% 22 Months Barclaycard Platinum GBP321.27 interest for the GBP263.27 GBP0 interest for the year, GBP58.00 BT fee year
Utilities - Best Online Tariff vs Average Standard QCC Tariff
Best Online Tariff Average Standard QCC Tariff Annual Saving first utility - iSave 9 GBP1,030.33 GBP1,286.58 GBP256.25
Home Insurance - Based on average savings through MoneySupermarket.com
Average Annual Saving GBP125.59
No product as quote is scenario based
Car Insurance - Based on average savings through MoneySupermarket.com
Average Annual Saving GBP383.22
No product as quote is scenario based
Current Account - Based on £1,500 overdraft
Best Rate Average Rate based on High Street Annual Saving 0% for 12 months, Santander Preferred Current Account 19.5% GBP0 GBP292.50 GBP292.50
Current Account - Based on £1,500 balance
Best Rate Average Rate based on High Street Annual Saving Santander Preferred Current Account 5% 0.65% GBP75 GBP9.75 GBP65.25
Mortgage - Based on £150,000 property
Best Rate (2 Year Tracker) Average SVR Annual Saving first direct 2.08% (with GBP1,499 fee) 4.83% GBP7,755.36 GBP10,462.20 GBP1,207.84
TV, Phone & Broadband
Average Monthly Cost (1 Year) Product (Including line rental) Max Speed Data Allowance Phone TV Variety Pack Sky Broadband Base Unlimited Sky Talk evening Freetime and plus Line weekend Rental GBP32.25 2Mb 2GB calls Line Rental GBP13.90 n/a n/a Anytime Broadband GBP16.30 8Mb 5GB n/a Basic TV Package GBP12.50 n/a n/a n/a Annual Saving GBP125.40
Total Annual Saving GBP3,188.48
Sourced by MoneySupermarket.com 08.12.2011
*£3,188.48 could be saved by comparing the average rate on offer from providers with the leading offer across the whole range of commodity products mentioned above (excludes current account overdraft figure)
**Opinium Research carried out an online poll of 2,002 British adults from 25th to 28th November 2011
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MoneySupermarket.com compares (at 24th November 2011)
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PR Manager (Financial Services)