High price of inertia

Britons are wasting up to ?5bn a year through failing to take a more active approach to managing their finances, research claimed today.

Banking with a high street bank, keeping savings in accounts paying low interest and failing to pay bills by direct debit cost the average UK household at least ?200 a year, according to on-line Zurich Bank.



The group's "all talk, no action" report found the savings could be even greater if you included money that could be saved through switching a mortgage or loan to a more competitive rate.

Around 85% of people admit they are inert when it comes to making important decisions, while 40% say they avoid doing things, such as going to the gym or sorting out their finances, even though they are good for them.

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.

But people's inertia is not limited to their financial affairs, with 75% saying they would not take decisive action if they were attracted to someone on a date, and 33% of men and 18% of women saying they have missed out on love because they did not act on feelings they had.

A quarter of those interviewed also said they would not do anything about an unsatisfactory relationship.

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."

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.

"Seeking out a competitive interest rate on your savings, re-mortgaging or paying bills by direct debit can make a real financial difference, which itself should be a clarion call against inertia."