27 May 2008 / by Joy Tibbs
Customers can save themselves thousands of pounds by comparing financial products and services before they buy, according to Moneyextra. The variation in prices charged by different lenders could mean customers are paying well over the odds if they fail to shop around.
The company’s most recent quarterly review of financial services records that replacing the entire range of near-worst financial products with the near-best could represent a difference of £3,363.84 over a year. However, this is £1,231.02 lower than the potential annual savings customers could have made in the first quarter.
This decline in possible savings is the result of higher mortgage arrangement fees introduced by many lenders, which Moneyextra claims have almost doubled. But although mortgages have risen in price, there are still savings to be made if customers do their homework.
Buying a £120,000 interest-only mortgage could cost you an extra £1992 if you fail to shop around, as the best offer, according to Moneyextra was found to be £553 and the most expensive was £719. Company spokesperson Robin Amlôt said: “Mortgages aren’t cheap and lenders aren’t fighting for our custom in the way they used to but you could still save yourself almost £2,000 a year just by making the right mortgage choices.”
Credit card deals can also offer significant price variations, with the best deal charging just £57.50 on a balance of £2,300 over a year and the worst charging £330 – a difference of £272.50. “We’re no longer being bombarded by blizzards of mailshots – card issuers are fighting each other for profitable customers who won’t default on their debt,” said Mr Amlôt.
Personal loans can vary by £433.08 over a 12-month period on borrowings of £8,000 over five years, while choosing the right savings account could save you £300 based on a £5,000 instant access account. Meanwhile, some current accounts that are £1,000 in credit could save you £84 over the year, while travel insurance deals differ by £145.34 for a couple aged under 65 taking out annual, global cover.
Cash ISA deals differ by £108 over a year for those with £3,600 in an instant access ISA account, while term life assurance on a policy with a £120,000 sum assured over 25 years for a couple aged 34 could present a discrepancy of £28.92 between the best and worst deals.
“Despite three cuts in the base interest rate, you still need to keep an eye on your savings – there’s a three per cent spread between the top and bottom of the ISA tables. But there’s good news for those seeking term life insurance – it’s getting cheaper all round with both near worst and near best costs coming down this quarter,” concluded Mr Amlôt.
© Fair Investment Company Lt