They call it the $11.6 billion lazy tax. And that’s the amount we pay as a nation for staying with our current service providers rather than moving to the service provider that can meet our needs at the best price.
Late last year, Heritage Bank commissioned QUT to research and report on the switching behaviour of Australians in regards to their banking, insurances and utilities.
More than half of us seriously consider switching our home loan, credit card, insurance, utilities and grocery providers, but in reality only 20-25% of us follow through. Of all the reasons why two stand out as being the most common.
These findings also revealed that those of us who did switch actually managed to save, collectively, over $2.5bn over the last five years.
So, why aren’t we switching?
Almost 40% of us simply ‘can’t be bothered’. While a slightly lower percentage feel that they should be rewarded for their loyalty, or simply believe that all providers offer the same rates. They lack information about different providers, services and their terms and conditions.
When it’s difficult to find clarity about where is better, we decide it’s better to stay where we are.
But, those who are switching, save.
This is pretty consistent across the results. Those who switch, save. And those who switch sometimes save big.
The biggest reported savings were made with banking products, but other services and spending habit changes save a substantial amount as well.
The biggest savings per year:
- Moving home loan to lower rate = most people save $1,000-$2,000
- Switching credit card = most people save $200-$300
- Home and Contents = most people save $100-$200, with 14% saving more than $500
- Energy = most people save up to $200
- Groceries = most people save up to $400, with 14% saving more than $1,000
- The Internet and/or mobile = most people save more than $200
It’s easy to find out how much we are spending
There are so many calculators available online, that can calculate how much money you can save per year if you simply switch providers.
Take the time to find these and compare what is out on the market right now.
Knowledge is power.
What about finding where we can spend less?
There are many websites now where you can compare banking, electricity and other service providers pricing. Taking half an hour out of your day could save you $100s or $1,000s over the course of the year.
So, what if I’m happy with my provider or can’t be bothered to switch?
Often, just threatening to take your service elsewhere is enough to obtain a discount. Calling your provider to ask them for the same deal that another company has on offer might even save you more than switching, but be prepared to take your business elsewhere if they can’t (or won’t) offer you something better.
Some other interesting facts
- If you live in the city you’re more likely to swap than if you live in the country
- The older you are the less likely you are to switch
- Individuals with a higher household income are more likely to switch
Have you switched providers and saved? Share with us below!
Image source Shutterstock.