Simon Moynihan: Cure your festive financial hangover
Simon Moynihan is the joint founder and communications manager of Irish price comparison site bonkers.ie which he established with David Kerr in November 2009. The site provides users with a free personal finance comparison service which helps them choose the most competitive broadband & home phone packages, electricity suppliers, savings accounts, current accounts, credit cards and personal loans.
Simon has become the latest to join JOE’s legion of expert columnists. In his first installment, he looks at how you can save up to €100 a month on household services.
Between the recent budget and seasonal spending sprees, Irish families are looking at a very lean January. We are encouraging households to take the opportunity to claw back some cash by identifying the best deals on essential services such as gas, electricity, broadband, phones and financial services. Our research shows that an average household can save up to €100 per month by finding better deals on the services they need.
Here’s how it breaks down:
Switching Gas Suppliers – €10 per month savings
Many households have switched electricity suppliers, but there are also big savings to be made by switching gas. A household using 18,000 kW/h of gas at a cost of €928 per year on the Bord Gáis standard tariff could save €120 per year by switching to the Flogas Standard deal.
Saving on the cost of Electricity – €10 per month savings
More than 60 per cent of households are still with ESB for electricity and are leaving over €100 million in potential savings unclaimed. Switching to the best deals from Bord Gáis or Airtricity will save the average household €116 over the course of a year.
Credit Cards – €24 per month savings
For customers with good credit, it makes sense to switch balances to a new card, particularly after the Christmas splurge. There are still banks open for business, looking for customers and offering good deals. There are 2.27 million personal credit cards in Ireland and the average debt on each one is €1,246. Switching that balance to a six month 0 per cent introductory offer could net €141 in savings over six months.
Current Accounts – €8 per month savings
Switching to a no-fee current account could save up to €72 per year. It’s surprisingly easy to switch current accounts and quit paying fees. With institutions like Bank of Ireland planning to reintroduce transaction fees, now is the time to look for the best current account deal. There are even rules to make the switch as straightforward as possible; the Irish Banking Federation’s Switching Code requires that all direct debits and standing orders must be set up on the new account by the banks on the customer’s behalf. And with some current accounts paying interest, customers could save even more.
Home Communications – €20 per month savings
Many households are still getting phone and broadband services from separate providers, and paying line rental. Costs for broadband and home phone can be reduced by over €20 per month, with some bundles offering broadband, home phone and free call bundles for as little as €30. With Irish line rental currently the most expensive in Europe at €25.36 per month, it’s worth checking to see if alternatives like cable broadband with phone or wireless broadband with phone are available.
Mobile Phones – €15 per month savings
There are now eight mobile phone suppliers operating in Ireland, offering the greatest choice ever (and possibly greater confusion than ever) to Irish consumers. Costs and plans vary widely, but a basic bill-pay plan with 175 call minutes and 100 texts can be had for as little as €20 per month or as much as €35. Choosing the best bill-pay plan can save €15 per month – or much more depending on customers’ needs.
Savings – €25 per month
Now is not a time to neglect savings, particularly for households with lump sums. Easy access accounts and strong interest rates of up to 3.0 per cent are still available from responsible institutions with good credit ratings. For households concerned about where they put their money, there are a number of non-Irish regulated banks operating in Ireland including RaboDirect, Nationwide UK, Ulster Bank, National Irish Bank and Leeds Building Society. Nationwide UK leads the way with a 3 per cent easy access account which will yield the equivalent of €25 per month on a deposit of €10,000. This compares to a yield of just €0.08 per month from demand accounts from Bank of Ireland and AIB.
The small print:
Average Irish household Christmas spend – Source Deloitte Christmas Spending Survey 2010. The average spend per household in Ireland this Christmas is expected to be €1,020, significantly higher than the European average of €590
Gas – Calculations based on an average annual household consumption of 18,000 kW/h. Tariffs quoted are Bord Gáis Standard and Flogas Standard 15% tariff. Annual cost for above consumption – Bord Gáis €927.79, Flogas €807.19. Total savings €120.60. Calculations include standing charges, carbon tax and VAT.
Electricity – Calculations based on an average household using 5,591 kW/h of electricity per year at a cost of €1,000 with ESB. Savings of €116 available by switching to paperless direct debit year 1 tariffs with Bord Gáis and Airtricity. €100 million estimate based on 60% of 1.469 million Irish households that have not switched. 60% of electricity customers is CER threshold enabling ESB to compete on price. Sources cso.ie & cer.ie.
Credit Cards - Average indebtedness on personal credit cards in Ireland is €1,246, source: Central Bank statistics for October 2010. Cards quoted are AIB "be" credit card with an APR of 22.7% and the Tesco Clubcard credit card with an introductory balance transfer offer of 0% for six months.
Current Accounts - BOI Standard Current Account charges €0.28 per transaction or €11.40 quarterly maintenance fee to include 90 transactions and €0.28 per transaction thereafter. Estimate of €6.00 per month or €72.00 per annum in fees made for comparative purposes.
Home Communications - €20 savings calculation based on switching from an Eircom phone line with 1Mb broadband and talktime chatter €46.79 per month, to UPC 1Mb Fibre Power broadband and home phone €25 per month.
€30 wireless broadband and phone bundle quoted is Imagine 1Mb WiMax & Off Peak phone bundle.
Mobile phones – Comparison made between O2 Clear 175 at €35 per month and 3 Mini Flex at €20. Comparison assumes 175 minutes and 100 texts used per month. Data from callcosts.ie.
Savings – 3.0% rate is Nationwide UK Easy Access Savings Account.