Brits waste £2 billion by not switching
More than seven million consumers could be wasting around £2 billion in savings by not switching to the most competitive financial products, according to comparison site GoCompare.com.
The website said that anyone who remains a customer of a bank, insurer, energy firm or telecommunications company due to loyalty is "sadly mistaken".
Around 15% of adults have never switched providers for 10 of the most popular financial products and could be missing out on average savings of: £242.55 on their car insurance; £159.43 on their home insurance; and £309.05 on their energy costs.
Poor-paying savings accounts and bank accounts, uncompetitive mortgages, phone and broadband contracts, and credit cards added further insult to injury.
Claire Peate, customer insight manager at Gocompare.com, said: "Customers who've remained loyal to their insurers, energy providers, banks and communications companies could be missing out on billions of pounds worth of savings, as businesses tend to reserve their best deals for new customers.
"Those who believe their loyalty will be rewarded are sadly mistaken, and our research proves time and again that customers who switch can save hundreds of pounds.
Car insurance remains the UK's most ditched and switched financial product, with over a quarter (26%) of drivers changing their car insurer last year.
Now's the time to shop around
However, Peate urges all drivers to shop around for a better deal: "The insurance industry underwent a huge shake-up in December 2012 with the introduction of gender neutral pricing, which has impacted premiums and renewal quotes throughout the year.
"As insurers continue to iron out any imbalances in their existing book, as well as battling costs from fraud and personal injury claims, consumers should be looking for savings by shopping around at their policy renewal."
GoCompare's research also revealed that, despite changes to make switching banks quicker and easier for customer, current accounts are still the least switched financial product - 38% said they've had the same current account all of their lives.
Peate said: "The only way to be sure of getting the very best deal is to check for yourself by comparing what's on offer from the competition. Don't expect your loyalty to be rewarded with lower premiums or prices. If you're happy to stay and pay, insurers, communications companies and energy providers will be laughing all the way to the bank."
Stuck in a rut
- 38% of consumers have never switched their current account
- 26% have never switched broadband provider
- 23% have never switched their mobile phone network
- 22% have never switched their land line provider
- 21% have never switched their mortgage lender
- 21% have never switched their ISA or Savings accounts
- 18% have never switched credit cards
- 15% have never switched energy provider
- 11% of consumers have never switched their home insurance
- 7% of drivers have never switched their car insure
- 15% have never switched any of them
- Only 13% have switched all of the above at least once
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.