Britons 'wasting £5bn a year'

Paying bills by direct debit can be cheaper

Britons are wasting up to £5bn a year by postponing some of life's most important financial decisions, a report has said

The average UK household loses at least £200 a year by banking with a High Street bank, keeping savings in low-interest accounts and failing to pay bills by direct debit, research by Zurich Bank suggests.

Householders could save even more money if they switched mortgages to a loan with a better rate, the bank said.

The survey suggested that 85% of people put off making important decisions, while 40% of those surveyed said they avoid doing things, such as going to the gym or sorting out their finances, even though they are good for them.

More choice

The report said that seven out of 10 people who are dissatisfied with their bank say they would not move, or would only think about moving, while 67% say they have never considered switching mortgage provider.

According to the research people aged 35 to 44 are most likely to avoid tasks, while those aged over 65 are least likely to put things off.

Dr Peter Collett, a psychologist and author of the report, said: "Inertia has a profound psychological and financial cost, which is exacerbated by the increasing amount of choice that modern life provides.

"There is an understandable temptation for people to put off making decisions or not to make them at all."

Financial cost

Chris Gillies, managing director at Zurich Bank, said: "For years High Street banks have been taking advantage of customer inertia by offering negligible current account rates.

"We want people to know that inertia's cost is not only psychological but also financial."

The research was based on 216 questionnaires completed in August last year, and findings from BMRB who questioned 1,000 people face-to-face between February 22 and 24.