Did you know that 76% of statistics don’t have any meaning or use, or are made up altogether? We see companies using numbers every day to try and show us how good they are and why we should go with them instead of their rivals. A lot of it just a marketing ploy, when if you analyse it, it doesn’t really give us the information we need to make an informed decision.
When a mortgage deal is advertised, the FSA say you must always show the APR, although most mortgage advisers will tell you that they never look at that figure due to it’s limited use. The APR works out the average cost each year, but assumes what interest rate you will be paying in the future, and assumes that you will stick with the same mortgage for the rest of the term without any changes, which is very rarely the case. The worst example of APR is with pay day loans. These are loans which allow you to borrow say, £200, until your next pay day, when you repay say, £250. And while they are a very expensive way to borrow money, how much use is it to know that the interest rate is 4000% APR.
There are a lot of insurance providers who tell you if you take out a policy with them, you will get 50% off, or 52 days worth of free insurance or some other discount to the price, but without knowing what the price is in the first place, what’s the point in thinking about the discount. You might get 50% off, but what if it was twice as much as it should be in the first place?
Even supermarkets now advertise about how ‘most of their customers’ shopping baskets are cheaper then if they went to another supermarket’. Often when I go shopping I will buy some things from one supermarket and other things from another supermarket because it works out cheaper that way, so both of them would be able to say my basket of goods was cheaper because I went to them. Even for those who do just go to one supermarket, they have probably tried most of them in the area and chose the one that is cheapest for the things they buy, but that doesn’t necessarily mean that they are the cheapest overall. It is a bit like me wanting to find out who the most popular supermarket is by asking people the question of who they prefer, but standing in the car park of one of the supermarkets while I am doing it.
This technique is used by a lot of companies, making the statistics come out how they want it to. Instead of asking ‘how would you rate our product?’ they will use the question ‘Our product is the best on the market, do you agree?’. It is very rare to see companies actually try to gather accurate and useful information when they are going to use it in part of their marketing.
Because there are so many providers trying to catch your attention by throwing numbers at you, it is worth contacting an independent financial adviser, who can gather all the information you need to compare products and find the one that is right for you. Kieron Bassett Financial Services has two Independent Financial Advisers. Contact us on (01524) 832057, via e-mail, info@kieronbassett.com, or visit www.kieronbassett.com.
Jason Hinde CertPFS
18th April 2011
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