Families could save thousands with lockdown review of finances

Families could save thousands with lockdown review of finances

By switching energy suppliers, a household could save €490 a year, Bonkers.ie said. Picture: Press Association

Families in lockdown could save potentially thousands of euro by spending the time undertaking a comprehensive review of household finances, a consumer website has said.

Bonkers.ie says health insurance, utility bills, television, broadband, banking, and mortgages all provide opportunities for squeezed households to recover up to €4,000 annually.

Bonkers carried out an analysis of common bills shows which concluded that by switching mortgage provider, a household could potentially save €214.42 a month plus €3,000 cashback.

By switching energy suppliers, a household could save €490 a year, Bonkers said, while broadband and television savings could shave off almost €50 a month.

Current account savings of more than €100 a year are possible, as are health insurance savings of €500 a year or more, it said.

Mortgage protection insurance could claw back up to €120 a year, the website concluded.

Daragh Cassidy, head of communications at Bonkers.ie, said that as the country heads into another six weeks of lockdown, he is urging people to take the time to review their finances to ensure they are not overpaying.

“Quite often people are put off switching as they feel it will take too much time and hassle. But one of the main consequences of lockdown is that many of us will find ourselves at home with a wealth of time on our hands. So bonkers.ie is urging people to try to use this second lockdown as productively as possible,” he said.

So-called ‘customer loyalty’ is overrated, according to Mr Cassidy.

“While many suppliers across a range of industries should be commended for the support measures they’ve introduced for customers, such as a moratorium on electricity disconnections or on loan repayments, people need to remember that loyalty seldom pays long-term and that the best value is almost always reserved for new customers, which is why it always pays to switch.” 

Swapping utility, broadband, and television providers is relatively painless and stress-free, Mr Cassidy insisted.

He conceded that while switching mortgage providers is more complicated, it isn’t insurmountable.

“Switching your current account or mortgage will require a little more work but the good news is that the Central Bank has strict codes in place to make switching these products easier. 

And while you're switching mortgage, your new bank or broker might be able to get you cheaper mortgage protection too. 

Mr Cassidy said that while Irish people are skilled at switching car insurance, it does’t translate to other forms of insurance, such as health meaning many are paying way over what they need on their health plans.

“As a result, it’s unsurprising that previous research has found that two out of every three health insurance members are potentially on the wrong plan. Older plans in particular are often outdated in terms of what they cover and offer very poor value. The potential savings for shopping around can be huge with savings of €500 or more on offer."

Examples of how households can save hundreds of euro: 

Mortgages:

Mortgage savings (€214.42 a month or just over €2,573 over the year) based on someone who is currently on a 4% rate who switches a €250,000 mortgage to KBC’s three-year 2.30% fixed rate and who has at least 20% equity in their home (ie a house worth €312,500 or more). Savings could be more or less depending on the size of the mortgage and the rate someone is currently on. In this example, the customer would also receive €3,000 cashback from KBC for switching.

Energy:

Energy savings of €490 a year based on an average household consuming 4,200 kWh of electricity and 11,000 kWh of gas per year paying a standard rate of 19.90c for electricity and 5.62c for gas (inc VAT). Savings could be greater if you are in a home with more than three bedrooms or which is poorly insulated.

Banking:

Current account savings (€100.20 a year) based on an Ulster Bank standard account holder who makes five chip-and-pin transactions a month, five cash withdrawals a month, 60 contactless transactions a month (ie around two a day), and has a total of 15 direct debits, standing orders and/or lodgements and/or online transactions presented to the account a month and who switches to either the KBC Extra current account, N26, Revolut, or the EBS MoneyManager account. An AIB standard account holder who switches would save (€87 a year). For KBC you must lodge €2,000 into the account each month.

Broadband and television:

Broadband and TV savings (€624.14 over the year) based on someone on Virgin Media’s ‘Mix 250’ (home phone, broadband, and TV) paying €92 per month who moves to Eir’s broadband, home phone and TV package with Apple TV for €39.98 a month for 12 months. Customers with Eir also get Amazon Prime Video for free for a year (usually €5.99 a month) saving another €71.88 a year.

Health Insurance:

A number of health insurers in the market have poor value schemes that are too expensive relative to other options now available. Any consumer on these plans could see savings of over €500 a year and should review their cover as a matter of urgency.

VHI Plans such as Health Plus Choice (€2,948), Health Access (€1,756), Forward Plan (€3,271), PremiumCare (old Plan E - €4,597) and even Family Plan Plus Level 1 (€1,635) Laya Plans such as Essential Plus (€3,793), Essential Plus Excess (€2,852), Flex 125 Choice (€2,395), Company Health Plus no Excess (€2,421) and Health Manager (€4,917) Irish Life Health plans such as Level 2 Hospital (€2,821), Level 2 Complete Health (€3,689), Optimise Silver (€3,973) and Optimise Platinum (€6,605)

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