AUSTRALIANS are paying a whopping $11.6 billion in ‘lazy tax’ every year by not shopping around for the best deal on their banking, insurance, grocery and utilities providers, according to a new study by the Queensland University of Technology.


The research, conducted by QUT and commissioned by Heritage Bank, found while 50 per cent of Australians had seriously considered switching essential service providers, fewer than 25 per cent acted on those intentions.


Over the past five years, consumers who had shopped around for a better deal reported savings of more than $2.5 billion, the report found.


The biggest savings came from home loans ($649 million), followed by grocery supplier ($593.8 million), energy supplier ($393.9 million), mobile phone provider ($327 million), home and contents insurance ($325 million), credit cards ($152.8 million) and internet provider ($136.5 million).

People with higher household income were more likely to switch for less money than those on lower household incomes. Males were more likely to switch than females, and people from the city were more likely to switch than those from the country. The older people get, the less likely they were to switch.


Brisbane mother of three Jessica Steele, 32, who runs two small businesses with her husband Brett, 45, said the couple had recently refinanced their five loans — four investment and one for their main residence — saving roughly $5400 a year.


“The advertised rate [with our new lender] was 4.14 per cent, down from 5.05 per cent, so that straight away stood out to us,” she said. “We asked Westpac if they could do a better rate and they couldn’t match it, so we changed.”


Mrs Steele said since the GFC hit, the family had become much more conscious of money. “We’ve had to cut costs and look at everything and pretty much start again,” she said. “You get to know your business better. We went through all our mobile bills, trying to find better deals.


“You just have to shop around and see what’s out there, and ask the question. All they can say is no. We’ve found just asking, ‘What can you do?’, is better than doing nothing.”


The study found the biggest barriers to switching were the perceived effort involved (37 per cent), the perceived costs (36 per cent), the perception that customers receive preferential treatment at their current provider (14 per cent), lack of information on different service providers (13 per cent), and the perception that all providers offer the same conditions (13 per cent).


Australians were most likely to switch their energy provider (29 per cent) and least likely to switch their credit card (17 per cent) and home loan (18 per cent), with customers far more likely to switch when the potential savings were made clear.


Nearly 83 per cent said they would switch their home loan if they could save around $3,000 per year and around 70 per cent would move mobile phone providers to save at least $150 per year. Customer service was also essential, with one in five moving banks due to unhelpful staff.


QUT’s Dr Juliana Silva-Goncalves, who surveyed a representative sample of 1000 Australians for the study, said the $2.5 billion figure was a “conservative estimate” of the potential savings.


“The message for the consumer is that if they switch to a different service provider which is more efficient, which provides a service more adequate to their needs at a lower cost, they can save a substantial amount of money,” she said.


“It’s interesting to see apathy as the key barrier to switching across such a wide range of industries. This belief it’s too hard to switch and too costly, is stopping households from saving thousands of dollars.”


Dr Silva-Goncalves said she expected this trend to change and the amount of people switching to significantly rise over the next year with the expected economic downturn motivating people to shop around and become more savvy.


“At the same time, we recommend businesses make all information readily available and highlight where clear savings can be made,” she said.