Can you trust the price-comparison sites?
Price-comparison sites are popular. But as Ruth Jackson explains, you may not always be seeing the best offers.
Most of us use comparison websites when buying holidays and insurance products because we think they will save us money, but investigations by the Competition and Markets Authority (CMA) suggest that some of these sites are actually ripping us off.
The CMA has launched investigations into both hotel-booking and car-hire price-comparison sites saying it has questions over their "clarity and accuracy". One of its main concerns is that sites hook you in with a big saving on whatever it is you are shopping around for, but by the time you get to the checkout page, so many extra fees and charges have been added that, in some cases, the initial price has gone up by 75%. "In some cases, customers are even being charged for extras [on their holiday booking] such as electricity'," points out Andrew Ellson in The Times.
In general, the CMA is concerned that customers are unaware of the tactics used by comparison sites, such as ordering results based on commission received, or advertising inaccurate discounts.
For example, holiday-booking comparison sites have been criticised for showing a discount relative to a price that doesn't match what you were searching for showing the discount on a hotel room compared with the weekend rate, for instance, when you actually searched for a Tuesday night stay. The watchdog is also going to look into the use of messages on comparison sites that give the impression a particular deal is in demand (such as "this hotel has already been viewed 45 times today") to check whether such claims are actually true.
Finally, the watchdog is expected to highlight the lack of competition in the industry. Although it's a good idea to use more than one comparison site to try to get the best deal, not everyone is aware that many of them are owned by the same company. Booking.com and Expedia dominate the market, and Expedia also owns two of the other well-known websites, Hotels.com and Trivago. In the column on the right, we look at how to make the most of comparison sites.
How to shop around for the best deals
Although the Competition and Market Authority's concerns about comparison sites should make you question whether you are getting the best deal possible, these sites can still be useful tools when you're shopping. Below we look at what to keep in mind when using them.
Firstly, when you get to the results page, make sure you are seeing all possible results. As comparison sites make money from you clicking on deals, some may only initially show you the deals they will make money from. You should be able to adjust filters so you can see all the site's results in one go, in order ofcheapness (just make sure you read the small print of the cheapest deal, especially with car insurance, to check for any exclusions).
Even with this done, individual comparison sites probably won't display every deal available, so it's worth checking a few different ones to make sure you are seeing a sizeable chunk of what's available on the market (although keep in mind that some sites are owned by the same company).
Finally, you will probably find that offers vary between sites depending on the deal a company has struck with that particular comparison site. This is particularly true with current accounts, where a switching incentive may be far better with one comparison site compared with another.
In general, it's common for different comparison sites to be better for different products. For example, Moneyfacts is a good choice for comparing savings accounts, while Money Saving Expert is recommended for choosing mortgages. You can find a list of the best sites for different products on the Money Advice Service's website.
In the news this week
Most bank accounts are paying pitiful rates of less than 1% on savings, says Ali Hussain in The Sunday Times. Overpay on your energy bill, however which more than a third of us do and you can earn interest of up to 5%. Ovo Energy pays customers 5% on any overpayment of up to £1,000, Tonik Energy pays 3% and Iresa, under certain conditions, 4.5%. Scottish Power, the only of the Big Six to pay interest, pays a maximum of 2.4%.
Of course, you can't just treat your energy account like a bank account. Iresa explicitly warns they may withhold interest credits if they suspect customers are deliberately overpaying, and the cost of being on the wrong tariff is likely to far outweigh any interest earned. However, these small energy suppliers' deals do compare favourably Tonik offers a dual-fuel deal for £860 while the standard variable tariff is £1,135 and if you do overpay, that interest could be a nice perk.
Although young people are under "intense pressure" to "rack up debt" so as to appear well-off, many secondary schools are "side-stepping" their obligations to teach personal finance, reports The Guardian. Although the subject was added to the national curriculum in 2014, only around 40% of schools appear to be teaching it about the same as were doing so pre-2014.
Martin Lewis, the founder of MoneySavingExpert.com, hopes a new personal-finance textbook aimed at teenagers, which he has helped to finance and which is being sent free of charge to every state secondary school, will help to break a generational cycle of financial illiteracy, which is "linked to debt, poor decisions and mental illness".
Lawyers have seen a rise in "post-nups", which are similar to pre-nups, but are often drawn up years into a marriage, says Laura Suter in The Sunday Telegraph. They are often triggered by events such as one spouse receiving a windfall, but "second marriages and more complicated family structures" play a part,too. Parents, for example, may want to ensure that children from a previous marriage are protected in the event of divorce. Like pre-nups, post-nups are not legally binding, but courts do take them seriously.