Loyalty costing households up to £732 a year
The top three regions where households can save the most by switching their home energy supplier, plus their home and car insurers, are the West Midlands (£732), the East Midlands (£665) and the North East (£660), according to Compare The Market.
The price comparison website conducted research in conjunction with The Simples Lab to calculate the cost saving it would take to incentivise consumers to seek out and change to more competitive deals. The study found that the annual cost saving it would take to prompt people to change providers is actually far lower than the potential savings available.
For example, households in the West Midlands have the potential to save an average of £732 by switching their energy and insurance providers. The average cost saving people in this region say would prompt them to switch is £234 – yet 61 per cent have not switched any of their providers in the past year.
Those in the East Midlands could also reap huge benefits from switching, with an average of £665 in savings available. This is £456 greater than their “tipping point” of £208, but six in 10 (60 per cent) of households haven’t switched providers.
In the North East, households can save an average of £660 by switching – one of the highest figures in the UK. But the region has the highest proportion of those who have not switched providers, at 71 per cent, despite people saying that, on average, they’d switch if they could save £211 a year.
The report also found the average Londoner could £568 by switching energy, home and car insurance providers. This saving is £269 more than the £299 Londoners say it would take them to switch, yet only a third (31 per cent) had sought out better deals.
Simon McCulloch, director at Comparethemarket.com, said: “All across the country people are missing out on hundreds of pounds in savings, despite the fact that they say they would switch providers for a lot less money. We call this group ‘actively inert’ – despite being able to save in excess of the amount which would be their incentive to switch, they still don’t shop around.
“The difference between comparing providers and simply rolling onto a default tariff or auto-renewing your insurance can be huge. Shopping around on energy tariffs, as well as motor and home insurance, is one of the most effective ways of combating rising household costs, yet the majority of people are still not taking advantage of these potential savings.”