Savings providers neglect customer loyalty
Loyal savers feel saving providers are letting them down, according to new research.
Half of savers believe providers treat new customers better than existing ones, with nearly a third saying their loyalty isn't being rewarded, a survey by Bank of Cyprus UK revealed.
But despite this, half of savers admit they have never switched provider, while one in three has stuck with their existing provider for more than five years. Nearly three-quarters of savers who do switch do so because they have found a better rate elsewhere.
Savers believe that saving products could be more transparent and easier to understand, with 32% citing interest rates and 42% citing how interest is taxed as areas where providers could provide better information.
Tony Leahy at Bank of Cyprus UK said: "The inertia reported by savers may be partly to do with interest rates continuing at an all-time low and the lack of a better deal elsewhere.
"However, savers want to be assured that when choosing a provider they will not be misled, forgotten about or have their loyalty exploited."
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.