Consumers could save £744 a year by going online to look for cheaper deals on shopping, utility bills and insurance, according to Lloyds Bank’s first UK Consumer Digital Index.
The survey of one million people measured the link between people’s financial well being and their digital know-how.
Over two-thirds (70 per cent) of people said the internet helps them to save around £62 per month or £744 a year. Consumers in Yorkshire are ahead of the trend and save an average of £68 a month or £816 a year.
With financial stress ranked as the primary cause of mental health issues in the UK, four out of five (86 per cent) people who use the web say they worry less if they can check their finances online.
The survey showed that digitally savvy people can save between five and 10 per cent on their utility bills - the equivalent to six weeks of utilities free each year which is particularly important given the increase in fuel costs.
Lloyds said that if the 7.1 million people who don’t have a bank account opened one and the digitally excluded went on line, UK adults could make savings of £3.7bn a year.
Generation X (those born between the early 1960s to mid 1980s) emerged as the clear financial winners of the digital age as they are savvy at shopping around online and confident about their money management.
The report said that without urgent intervention, the UK’s projected digital growth will deepen the divide between the online savvy and those who are financially and digitally excluded. It warned this could risk their financial and personal well-being.
It found that people who earn less than £15,000 a year could save £516 per annum, a significant proportion of their earnings. This could cover the cost of ten weekly food shops for the family, fill the car with petrol ten times over, or pay for nearly half a year’s dual fuel bill.
The report showed that people who access research and comparison sites, offers and discounts, have a real advantage against their non-digital peers. This means they are typically more financially resilient and also report greater overall well-being.
Miguel-Ángel Rodríguez-Sola, group director of digital at Lloyds said: “Irrespective of geography, age and circumstance, a person’s financial situation has a huge impact on the way they are able to live. It impacts day-to-day welfare and wider well-being.”
While Generation X is reaping the biggest benefits online, it is the over 60s who have the most to gain digitally. This age group is financially savvy and adept at saving and using a variety of financial products and services, yet fail to realise the huge savings they could make online through price comparison sites.
Martha Lane Fox, chair of digital skills charity Go ON UK, said: “It’s unacceptable that the people who can benefit the most from what our digital age has to offer are currently missing out making huge online financial savings.
“Of the over 60s who are digitally excluded, 64 per cent say they are worried about privacy and security and 62 per cent claim the internet is of no interest to them. Yet, a staggering 86 per cent of people who manage their money online say they worry less.
“We know that the older generation, whilst financially capable, are more likely to be concerned about the safety and security of the internet, yet this evidence shows there are huge emotional benefits if people have more choice and control around their real time money management.”
The research also looked at what might help encourage older people to engage digitally. Despite being offered a range of options from free access to skills and training, almost half of the people who are digitally excluded and over 60 said that nothing could encourage them to get online.
“It is vital more is done to help boost the lack of confidence and motivational barriers that may be holding people back,” said Ms Lane Fox.
Jocelyn Royle 27, lives in Leeds with her husband Ben and children Theo, 5, and Poppy, 17 months.
The greatest saving she has made online is her car insurance, which she has reduced by over £200 a year. She also tries to sell any unwanted items online.
“I’d guess that I was over £600 better off last year just by being online,” she said. “I am fairly confident online, although I know I could do more to save money. One of my New Year’s resolutions is to shop around more online to compare prices – I’m sure I could probably find better deals on energy bills and the weekly shop.”
An online and mobile bank user, she checks her balance twice a week. She regularly uses sites like Gumtree to sell items and make purchases.