The financial services sector ploughs millions of pounds into advertising every year. But the products don’t always live up to their slick ad campaigns and eye-catching marketing claims. Have you ever bought a financial product that’s turned out to be a dud?
When buying an insurance policy or choosing a bank account, it’s not as straightforward as going into a shop and trying it on for size; you can’t easily judge its quality by sight or by touch.
This is likely to make our decisions more influenced by providers’ marketing promises. But if you accept these at face value you could end up paying over the odds for a policy, account or service that appears to be beneficial, but may have significant downsides.
So, are there some financial products that you just don’t need? We think so, which is why we’ve compiled a list of overpriced financial products we believe you can live without. We think each one offers poor value for money – and there’s usually a better alternative too.
What a waste of money
Some financial products are overpriced – such as the excess waiver cover sold by car-hire firms – which can cost as much as the rental, and is available for a fraction of the price when bought from a specialist UK provider.
Similarly, insuring your phone with a policy offered by a mobile network is an expensive option – it can set you back as much as £160 a year for an iPhone. A better option is to get cover through your home contents insurance policy for around a tenth of the price at just £16 a year.
Others have a long list of limitations. Take over-50s plans, which pay out a fixed lump sum when you die – these can easily end up paying more in premiums than your loved ones will receive. And if you decide to cancel a plan at any point, you’ll usually get nothing back. If you’re in good health, you’d be better off putting your money into a savings account.
Financial products you don’t need to pay for
In some cases, there’s no need to pay for the service at all. If you want to check your credit score, for example, you can do so for free – rather than paying up to £180 a year for a subscription service from a credit reference agency.
Or if you’re looking to claim compensation for the ultimate useless financial product – PPI – steer clear of claims management companies. They’ll typically take 28% of any compensation you’re offered and add VAT on top. It’s easy – and free – to submit a claim yourself – just use our PPI tool.
Have you forked out for a poor-value financial product and then regretted it? Which ones would you add to our list of products you can live without?
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