How loyalty can add £725 a year to household bills: Long-standing customers face higher prices because they are not haggling

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Families are losing out by as much as £725 a year by failing to haggle over fees for their broadband, insurance and energy.

Long-standing customers are paying the price for their loyalty by facing higher charges from providers.

But the same firms are offering cheaper deals to new customers or those who are willing to barter hard and threaten to leave. 

A survey of 2,000 Britons by consumer group Which? found that many are reticent – or even embarrassed – about haggling.

A survey of 2,000 Britons by consumer group Which? found that many are reticent – or even embarrassed – about haggling

Some appear to fear shopping around and moving their account, particularly with gas and electricity, because they are confused or scared it will go wrong.

The survey found four in ten – 42 per cent – have not haggled with any service provider in the past 12 months. Customers were least likely to request a discount on their mobile phone contract, broadband or car breakdown cover.

However, the survey found that there are significant savings to be had by those who are willing to get tough.

Nine in ten broadband and pay-TV customers who asked for a better deal were offered a discount or incentive. 

Those on a combined broadband and pay TV service saved £216 annually. Some 77 per cent of mobile phone users secured a better deal on their contract by haggling, with an average saving of £72 a year.

Nine in ten broadband and pay-TV customers who asked for a better deal were offered a discount or incentive (stock image) 

Those who pushed for a better agreement on home, car and car breakdown insurance policies made a total average saving of £125 in a year. And more than three-quarters – 77 per cent – who were prepared to barter over insurance or telecoms were offered some sort of incentive. Seven in ten of them received a fixed discount on their payments.

Almost a third of households have been with the same energy supplier for more than ten years.

Which? research found they are likely to be on the expensive standard variable tariffs, but could save up to £312 a year by switching to another supplier.

By wrangling with companies over the cost of such household expenses, families could save a total of £725 a year off their domestic bills. Separately, those on standalone broadband packages saved an average of £120 a year by haggling.

Which? also offered householders a series of tips for getting the best deal, which included:

n Don’t feel awkward about asking for a discount. It is a conversation companies expect to have. Their pricing is set up so they can offer discounts to hagglers.

n Compile evidence to justify the discount request, such as details of problems, how long you have been a customer, whether usage matches the price charged and deals available from rivals on comparison sites.

n Explain if you simply can’t afford the price and have a good reason for haggling, for example if your main income is low.

n Have a clear idea of what you want. Haggle with your provider for a lower price – and then take that price to another provider to match or beat it. Go back with the new quote to your original provider to see whether they will match it.

n Use the three Ps: Be polite and pleasant, but persistent.

Alex Neill, managing director for home products and services at Which?, said: ‘People who stay with the same energy, telecoms or insurance company year after year rarely get the best deal. Customers paying the price for loyalty should ask their providers to reward them or be prepared to lose them.’