You wouldn’t buy a second kettle if yours is currently doing its job perfectly well.
But when it comes to financial products you need to be careful that you’re not doubling up with services you currently have or don’t actually need.
Too often consumers buy insurance cover they already have and waste money on financial products. MoneyExpert.com points out the doubling up that can add up to a waste of money…
One of the main ways in which we end up doubling up is due to the packaged current accounts being offered to us by the banks.
Some estimates suggest that as many as one in six of us currently have a packaged account and then go and buy things we are already paying for.
These accounts which charge a monthly fee, generally of around £10, offer services such as a yearly travel insurance policy or mobile phone cover. If you have a packaged account like the RBS Royalties Gold account, which charges £12.95 a month then make sure you’re aware of what services are included so that you don’t end up taking out an additional services you already have.
Remember that your packaged account is likely to cost you at least £120 a year so if all you’re using is the travel insurance which can start from as little as £30 for a single trip or £50 for a yearly policy it’s important to decide whether you’re getting value for money from your package or whether it’s worth taking out the products individually.
Over the counter
A second way in which many of us end buying more protection than we need is through over the counter sales insurance.
The chances are that last time you bought a TV or stereo the retailer asked you whether you would like to insure the product against theft or a malfunction. These polices tend to be low cost, perhaps £5 or less a month but if you have a comprehensive home insurance policy then the chances are that you’re already covered.
If a product breaks within weeks of its purchase and you bought it on a credit card then the chances are that it is covered by your card provider too, so check the card details to see whether this is the case.
Payment Protection Insurance (PPI) isn’t so much a product you’re likely to double up on but many people question whether it’s something we actually need. The service is one that guarantees your income or ability to make repayments on things such as your mortgage or credit card debt for a specified period.
The problem is that only a tiny percentage of people ever make claims on the insurance, normally either because of ill health or because they’ve lost their job. This type of policy may give you peace of mind but is expensive prompting many to question whether it’s actually necessary.
Out of pocket
The chances are that if you haven’t been keeping a close eye on your finances and the services that you’re being sold then you will have doubled up on something, in most cases an insurance policy, which could be leaving you out of pocket. Be sure to review your finances and any direct debits you have regularly this way you’ll by giving your finances a spring clean which is bound to shake out the non-essentials.