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WEBSITES CAN BOOST YOUR SPENDING POWER
The average family has lost £1631.30 from its disposable income, says the Centre for Policy Studies think tank - because of stagnating earnings, tax hikes, excessive debt, rising interest rates and soaring utility bills.
Even households which once managed comfortably are feeling the squeeze.
But Sean Gardner, chief executive of MoneyExpert.com, thinks some of the
lost spending power could be restored with a bit of homework.
By concentrating on five financial basics - home and motor insurance, mortgages, personal loans and credit cards - MoneyExpert.com thinks average households could save thousands per year.
Says Sean Gardner: Four out of five of us overpay for at least one of the financial basics. Typically, UK consumers pay out thousands per year more than they need to. People should spend a few minutes online to review their finances.
Few deny the internet brings new transparency to the financial products market. The over-60s rely on online accounts for top savings rates.
But do computers find the best product- or merely the cheapest? The focus on price could have sunk Simply Switch, a leading energy price comparison site bought by the Daily Mail group 18 months ago.
As demand to switch energy suppliers fell, income drained away from energy price comparison sites.
Meanwhile uSwitch.com, is set to remain among the front runners in the online sector with its range of price comparisons extending into current accounts, personal loans, credit/debit cards, heating cover, home telephone and broadband, digital TV, mobile phones and car insurance.
It could be that the focus of personal finance websites is shifting from energy costs to insurance; nearly 70% of drivers are said to use price comparison sites when they renew their policies.
Moneysupermarket.com, floated on the stock market in July 2007, is the clear market leader, reckoned to attract nearly 45% of all online financial traffic. But a 30% fall in its share price since flotation underlines the cut-throat nature of a fast-changing market place.
Leading rivals include Confused.com, the online arm of car insurer Admiral; GoCompare, backed with loans from car insurer esure (part of HBOS); and TescoCompare, a car insurance site launched to some scepticism last September because it listed a small number of suppliers and is backed by Royal Bank of Scotland, which previously criticised online price comparisons of financial products.
TescoCompare maintains quality of product is more important than price, and offers product comparison across 25 policy features.
Tesco already earns huge profits from its financial products. If it returns to estate agency in 2008 after a rebuff in 2007, as many expect, it could have a platform in financial services to worry even moneysupermarket.com
Smaller rivals are limbering up in the background: Moneyfacts.co.uk, hitherto seen as largely a trade site for professionals, has joined Switch Wizard to compare gas, electricity, home phone and broadband suppliers - and with BeatThatQuote for home and motor insurance.
The British Insurance Brokers Association (BIBA) questions the move to online providers: based on a sample of 250 consumers, of whom 125 had used a price comparison site, it is calling for insurance websites to be regulated in the same way as insurance intermediaries.
The Governments City watchdog, the Financial Services Authority (FSA), is ready to investigate the online sector. Its remit could look at fees charged for inclusion in online tables, commissions paid for new customers, and online financial advertising.
Some websites welcome the possible FSA probe. Says Debra Williams, managing director of Confused.com: We accept insurance comparison sites should be regulated in the same way as insurance intermediaries, and have voluntarily invited the FSA to regulate our activities.
At independent financial research company Defaqto, Head of Insight Brian Brown believes its time for a closer look at the online provision of some financial products.
Certain issues on insurance sales should be clarified, he says. People are not always clear about the role of an online intermediary, about who sorts out problems if there are difficulties later with a policy.
Consumers have to realise that motor and home insurance products are not all the same, says Brian Brown. But it is easy to forget this as online providers make it so easy to find the cheapest deal.
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