Being taken for a mug and other stories
Martin-Redman Partners writes - I have just had a reminder that utilities companies are happy to take loyal customers “for a ride”, as a little shopping around has secured a 30% reduction in energy bills and a significant reduction in the monthly “budget” price of energy throughout the year.
Most people, and I have to include myself in this group, are happy to remain with a supplier for many years, so long as they do not appear to be acting in “bad faith”. Once “bad faith” has been perceived, the desire to leave the existing supplier becomes very strong, sometimes trumping the desire to save money – just leaving is enough!
Utility companies, motor insurance providers, household insurers, banks, telephone companies and Internet Service Providers, (ISPs), are past masters of not valuing loyalty and setting deals for “new customers only”. For a colleague, 30 minutes collating his energy bills and using the uSwitch Internet site got a reduction of several hundred pounds on an electricity only energy bill of under £1,000 per annum. He has remained with his existing provider, despite this whole exercise being prompted by a planned increase in his monthly budget spend from £75 to £125 per month. This increase to my jaundiced eye was just an exercise in profiteering – I cannot see a good reason to raise the monthly charge, except to increase the provider’s cash flow.
For any of us, just going with the flow is dangerous. Taking a passive approach to the regular bills of life is easy to do but can work out very expensive over time. As so few companies make any concessions for customer loyalty, we as consumers, must test the market on a regular basis or be “taken for a ride” at our expense.
For energy bills, the uSwitch website is a good place to start, www.uswitch.com, but like so many comparison sites, it does not cover the whole of the market, but it does give you a stick to beat the incumbent with. There are many other energy comparison sites, including:
Classical economic notions of capitalism expect perfect knowledge, (which comparison websites help with), and requires consumers to act rationally, (move to the cheapest supplier), but there is so much inertia in the system. Providing discounts only to those who ask is good business. Perhaps people need to see shopping around as a political act or perhaps a public duty; preventing “sheeple” from being fleeced!
What really raises my hackles is that the poor will generally pay higher energy tariffs than the better off. Prepaid and key meters are between 5% and 25% more expensive than direct debit tariffs, so you need to keep your credit history clean and run a bank account that can operate direct debits to get access to lower charges.
If you would like to know more about how we can help you plan and realise your financial goals then contact us at firstname.lastname@example.org or call us on 01223 792 196.
The information contained is for guidance only and does not constitute financial advice. It is based on our understanding of UK legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Martin-Redman Partners its officers or employees, for any loss in connection with the content hereof and any such action or inaction.
We provide independent financial advice on investments, pensions, inheritance tax planning and family & income protection. We work with private individuals, businesses and professional introducers, such as accountants & solicitors, to ensure our clients financial advice needs are met.