Money

Laziness is costing Aussies $11.6billion

Published on September 8, 2016 1:36 pm, by

Is switching providers worth the effort?

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.

Why don’t we switch?

#1 The effort it would take

#2 The lack of information around 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.

Those who do switch 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:

  1. Moving home loan to lower rate = most people save $1,000-$2,000
  2. Switching credit card = most people save $200-$300
  3. Home and Contents = most people save $100-$200, with 14% saving more than $500
  4. Energy = most people save up to $200
  5. Groceries = most people save up to $400, with 14% saving more than $1,000
  6. The Internet and/or mobile = most people save more than $200

It’s easy to find out how much we are spending

Your MoneyBrilliant reports, available in the desktop service, can identify how much you are spending each month, quarter or year with each provider.

Click these links to get your last 90 days of spending –

Home Loan Interest (filter by your home loan accounts on the left hand menu)
Groceries
Insurances
Utilities
Credit card interest and fees (filter by your credit card account on the left hand menu)

Knowledge is power.

What about finding where we can spend less

We have done the research into the cheapest products for you in home loans, credit cards and transaction accounts:

Best options for refinancing your home loan
Credit Cards: finding the right one
Transaction Accounts: why pay fees?

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.

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

Information sourced from –
Australians’ switching behaviour in banking, insurance services and main utilities (September 2015)
Prepared by Dr Julian Silva-Goncalves, Queensland University of Technology, on behalf of Heritage Bank

Related Articles –
Knowledge is Power – know where your money goes

 

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Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.

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