Do you understand the products you compare?

12 June 2012 17:25:00

Many do not understand key features of financial products.

If you are in the habit of going online to compare financial products but still do not really understand the information you read, you're certainly far from alone. A new study from independent financial research company Defaqto suggests that Britons are getting better at going online to compare home insurance and other products. While that's undoubtedly good news for consumers, it seems that many do not actually understand the products they look at.

Majority now shop around for financial products
Defaqto's research found that an overwhelming majority of people have now got into the habit of comparing products. The company's poll revealed than 93% of Brits compare the features of different products, while 89% compare the level of features between products. Its findings are likely to be welcomed by consumer groups, which say consumers can save a large amount of money - and enjoy better customer service - by comparing products and switching if necessary.

But many remain clueless
But it's not all good news, as Defaqto's research also revealed that many people still have a poor grasp of financial concepts and products. Almost half (47%) of survey participants admitted they do not always know the meaning of different product features, which means they are unable to make a fully informed choice. It is also likely to result in people missing out on features, benefits or insurance cover that they might have welcomed.

David Cartwright, head of insight at Defaqto, said: "Whether you are insuring your home or your car, [or] buying a protection product for you and your family, it is essential that you take time to consider whether the features and benefits that you require are actually provided by the product you choose." He added that with such a wide variety of products to select from, "it's understandable that many consumers are sometimes confused by what's on offer".

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