Why are we so hung up about changing our old phone deal?

Millions of us are still engaged to BT, says Melanie Bien, but the savings could be huge if we switched to a new call supplier

It may be good to talk but it's even better to save money while you're having a natter. Yet while many of us have worked out the savings to be made by switching gas and electricity supplier, few of us have bothered to change our home telephone provider.

It may be good to talk but it's even better to save money while you're having a natter. Yet while many of us have worked out the savings to be made by switching gas and electricity supplier, few of us have bothered to change our home telephone provider.

Around three-quarters of households still rely on BT to provide their telephone calls, and around 63 per cent of these customers have been with the provider for more than 10 years, even though competition for our telephone calls is fierce.

However, with savings of up to 70 per cent to be made if you can put in around 10 minutes' work establishing the best supplier and tariff for your needs - says Save Money Now, the online price-comparison service - it could be well worth the effort.

"Many people wouldn't dream of booking a holiday or buying a hi-fi system without shopping around, yet few apply the same consideration when choosing a telephone provider - despite it being more expensive in the long term," says Ian El-Mokadem, managing director of communications company One.Tel.

Since carrier pre-select (CPS) was introduced in 2001 - removing the need to dial a prefix or install a dial-up box in your home - the number of alternative providers to BT has rocketed. Hundreds of operators have set up interconnecting telecommunications networks, spawning a huge number of resellers who use these networks to route calls.

At the last estimate, there were more than 1,000 operators and resellers, so there's a decent chance you will find a better phone deal.

Unfortunately, many people believe that switching is complicated, time consuming and pointless because they won't save money. Yet the process is simple and free: you pick a new provider, tell them you want to transfer and they do the rest.

You keep your BT line and pay the normal rental charge - with the call charges going to your new provider, such as One.Tel, Just Dial, Talk Talk or Tele2. Switching to a new telephone supplier can take up to 21 days, although it is usually completed within two weeks.

The hardest bit is deciding which provider to transfer to. With so many combinations of tariffs and offers, it can be hard to figure out what you need and how much it will cost.

Most communication providers offer three or more tariffs (basic plans) which are bundled with additional plans for calls to international destinations and mobile phones. Some providers also offer call-circle plans (friends and family) for discounts on special destination numbers.

Basic plans are either free (with all the calls chargeable) or attract a monthly subscription in exchange for a set amount of free call minutes.

BT offers three basic plans, two of them subscription based with free local or national calls during off-peak or peak hours. Calls to mobile phones are charged at a uniform rate.

BT also offers a choice between the standard calling rate for international destinations and an optional, chargeable discount international plan. There is also a friends and family, call-circle plan, offering a 10 per cent discount on specific destinations.

While this array of choice may be confusing, it's nowhere near as complicated as the combinations on offer at Caudwell Communications. This company offers the HomeCall brand of services with access to four basic plans, which can be coupled with one of six mobile call plans and five international plans. This means there are a mind-boggling 90 different tariff combinations.

Picking the best carrier and most suitable tariff deal can be daunting, but the easiest way of comparing what's available is to use an independent price-comparison website. Uswitch.com is the only one recommended by Ofcom, the regulator for the UK communications industry. It is also worth trying unravelit.com, which recently launched detailed price comparisons. After using the service, one unravelit.com user is making an annual saving of £200 thanks to a switch from BT to One.Tel.

"There are over 20 different variables that determine the cost of the call, such as the duration, the destination and the time of day," says Florian Ritzmann, the commercial manager of unravelit.com.

"It is ironic that the complexity of choice serves as a perverse barrier to switching, but we believe we have now made that process very easy."

If you log on to one of the comparison websites, you will be asked several questions about your current usage, such as how long your calls tend to take, when you make them and the destination of those calls. The service will then work out the cheapest deal for you.

There is no obligation to switch, but if you want to, you complete the form online. The comparison service sends your details to the new provider, which handles the switch automatically at the telephone exchange.

You will receive more than one bill: one from BT for the line rental and the other from your new call provider. But this is a small inconvenience if the switch results in big savings. There are plans for the introduction of a line rental scheme for telecoms firms later this year, so BT customers will be billed for their line by their new provider.

For a free, step-by-step factsheet to switching, log on to www.onetel.co.uk/switch

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

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