The research led by the UCL, jointly with GoCompare, also found that a third of customers in the UK have never switched energy or home insurance provider.
The average British household could be losing £367 a year on their insurance and energy bills by not comparing offers and regularly switching providers.
The study revealed that customers who do switch providers pay on average £367 less a year on their home bills – £144 a year on car insurance, £110 a year on home energy bills and £113 a year on home insurance.
Unfortunately, people just don’t have time for that. Behavioural Economist and Assistant Professor at UCL Joe Gladstone explains:
“In the energy market, lots of default tariffs of energy suppliers are a bad deal for consumers. They can get a good deal if they keep switching every year but the reality is a lot of people don’t know how and when to do that.”
The research also found that people experiencing financial distress tend to “avoid information contained in bills, look at a bill for less time and remember less information from it.”
GoCompare CEO Matthew Crummack said: “To beat the bills, people need to get bothered and get switching. But financial and energy providers also need to communicate more effectively. Letters and bills often aren’t read in detail by the most financially distressed, and so they need to be easier to understand.
Those more likely to switch providers were people with greater financial literacy, who discount the future less.