How to navigate the maze of financial comparison sites
Money websites are not always as impartial as they say they are
Saturday 16 June 2007
The internet has proved both a blessing and a curse when it comes to shopping around for the best financial products. While consumers now have instant access to more information than ever before, this has also made it much harder to find exactly what you're after.
The solution finally arrived in the form of comparison sites, of which there has been an explosion over the past few years. More and more consumers in search of everything from insurance to cheaper utility bills now make sites such as moneysupermarket.com their first port of call.
There is no doubt that these sites have changed the market for the better. An increasing number of people are now regularly switching provider to make sure they're getting the best deal, and this has inevitably helped to drive prices down.
But while most comparison sites will go to great lengths to highlight their "independence", most are nothing of the sort. While they provide a useful service, and may well find you the best deal – many do not cover the whole market and all of the UK's main comparison sites are commercial organisations, who are under pressure to increase their profits.
The most common way for comparison sites to make money is to receive a commission when they help guide a customer to another website. Some providers also pay more so that customers can go directly from the comparison site into their application process.
However, it is increasingly common for these providers to gain undue prominence on the site. For example, if you're looking for a credit card on simplyswitch.com, you'll be directed to a page which displays three cards at the top, underneath the heading "Current best credit card deals". These are all companies which the site has commercial agreements with and, as the site's founder admits: "Trying to find the best deal is like trying to find the perfect man – it doesn't exist."
Darby defends the site saying that these cards are displayed for customers who want a "quick, cheap and easy" experience. For those who want to scour the market, Simplyswitch offers a search facility, which includes details of cards which the site has no commercial link with.
Uswitch is equally as bad on its personal loans page, where it has a simple comparison service that only includes providers with which it has a link to. Again, the full search is available, but it's another click away. Simeon Linstead of Uswitch says that the site gives prominence to providers it links to because its research shows that consumers want to be able to go directly through to the application process. "To offer a free service, you have to earn your income from somewhere," he adds. "But we're very focused on ensuring the customer gets treated fairly."
Another problem with many comparison sites is that you often won't get what you're quoted. If you're shopping for car insurance on moneysupermarket.com or one of several other sites, for example, you may get one quote online, and then find that after being called by the insurer, to answer a few extra questions, you are offered a better or worse rate. Richard Mason of moneysupermarket says that this is because its own motor insurance questionnaire is not as detailed as some of the insurers. However, other sites such as confused.com pride themselves on being able to offer customers the price that they are quoted on the website.
It's also worth noting that you won't get a quote on your home, motor or any other kind of insurance from Direct Line or Churchill – two of the country's biggest insurers – on any UK comparison site. This is because they have refuse to provide their data to the sites.
Emma Holyer of Direct Line, which has recently launched a marketing campaign urging consumers to shun comparison sites, says that this is because they've "never worked with middle men", and because they dislike the fact that many sites quote consumers the wrong price. However, Moneysupermarket's Mason has a different take: "Direct Line don't want to be on our site because their prices are not competitive."
You should also not assume that because a comparison site does a good job in one market, they will also be good in another. Moneysupermarket has just three pet insurers signed up to its pet insurance channel and does not include any of the others in its search.
And while confused.com may have a great motor insurance search engine, most of its other product lines are poor. If you're looking for a current account, it takes you to a table with just two banks. Jennifer Rose of Confused concedes that there is room for improvement across the industry: "Comparison sites are not perfect – it's an evolution."
If you've got the time or the inclination, the only way to ensure you're getting the best deal is to search a handful of comparison sites. When I looked for the best electricity and gas package across five different sites, four of them gave me different numbers for the amount they thought I could save by switching – even though they all claim to take their data from the same feed. Furthermore, two picked out Scottish Power as the cheapest and three picked out NPower. One even suggested I would be £68 a year worse off if I picked Scottish Power.
Simplyswitch's Darby explains that differences in the sites' questionnaires are usually to blame for any differences in quotes.
Florian Ritman of Unravelit.com warns that providers who do not have their own licence, such as EbiCo (which borrows Scottish & Southern's licence), may also not be included on some sites, even though they offer some of the lowest prices on the market.
Energy switching sites do at least have a voluntary code which most adhere to. This should ensure that you get a similar quote regardless of which site you go to. However, other parts of comparison sites are generally not regulated. The Association of British Insurers is looking at introducing a code for insurance sites – which would be a welcome development.
How the sites measure up
What can you compare? Utilities, heating cover, broadband, home & mobile phone, TV, car insurance, loans, credit cards, bank accounts.
Plus points? The site's utility switching services are easy to use and comprehensive.
Minus points? Providers with whom it has a commercial arrangement are not highlighted clearly enough on the credit card and loan pages.
Our verdict: One of the broadest ranges of product lines, but needs to make it clearer where it has commercial agreements with financial services providers. 7/10
What can you compare? It's easier to say what you can't compare: home phones.
Plus points? The site has chat forums where you can ask experts or users for help with your financial problems.
Minus points? Its pet insurance channel covers just three providers – hardly the whole of the market.
Our verdict: Moneysupermarket is the giant of the comparison sites, but it's not squeaky clean. Like some of its rivals, it could be better at explaining when it is comparing the whole of the market and when it's not. 8/10
What can you compare? Utilities, phones, mortgages, broadband, credit cards, car insurance.
Plus points? You can buy energy-saving items on the site to lower the cost of your energy bills even further.
Minus points? The site's main credit card page pushes providers with which the site has a commercial relationship.
Our verdict: Simplyswitch started out just doing energy, and it is still strongest in this area. Its link-up with comparethemarket.com for car insurance is useful and it has resisted growing too fast. 6/10
What can you compare? Utilities, broadband, insurance, phones, plus many other banking products.
Plus points? Its car insurance search engine is the most comprehensive, and you'll end up paying the same price as you are quoted.
Minus points? Aside from motor insurance, most of Confused's other channels are not great. They have poor choice and are commercially driven.
Our verdict: Confused should probably stick to what it's good at – motor insurance - and not bother with the rest until it's ready. 5/10
What can you compare? Utilities, broadband, phones, travel and home insurance, credit cards, loans.
Plus points? Unravelit makes most of its money from selling its technology to other companies, so its consumer website is a little less influenced by commercial deals.
Minus points? Having said that, its credit card channel guides you only to the cards with which it has direct links.
Our verdict: Unravelit site is still relatively low profile and not yet quite slick enough. But has great potential to cut itself out as truly impartial. 6/10
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
The best deals on personal loans: Peer-to-peer providers are more competitive for smaller sums
China stock market: My portfolio's in pain, but it was never for the financially faint-hearted
China stock collapse: Five things you need to know about 'Black Monday'
Questions of Cash: 'Our dividends seem to have disappeared when TSB was bought and then born again'
Mark Dampier: 'Masterly inactivity - the case for sticking with smaller firms'
- 1 The difference between a migrant and refugee, in one sentence
- 2 Miley Cyrus calls out hypocrisy of women’s nipples being taboo
- 3 Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
- 4 iPhone 5c to be discontinued, no iPhone 6c to replace it
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...
Day In a Page
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.