Could you switch to a better deal?

Published by Laura Whitcombe on 26 July 2013.
Last updated on 26 July 2013


Too many of us give in to inertia and scepticism rather than vote with our feet and move our custom to different companies. According to the Moneywise Consumer Opinion Survey 2013, 68% of current account holders have had the same account for 10 years or more.

That means they could really be missing out – both in relation to the incentives on offer to new customers and in terms of customer service.

For example, for the past five and a half years, the First Direct 1 Account has offered a £250 interest-free overdraft and a £100 bonus for switchers to the bank who have at least £1,000 paid into their account every month. If you're not impressed by its customer service, it'll give you another £100 if you decide to close your account within the first 12 months.

Arguably, you should be impressed by First Direct's service – it's been voted Most Trusted Current Account Provider for Online Service and Call Centre Service by Moneywise readers, and was highly commended in the Most Consistent Financial Provider category of this year's
Moneywise Customer Services awards.

But it's in the insurance and energy markets that failing to switch could really be hurting you in the wallet. Figures from comparison site show that the average comprehensive premium for drivers between the ages of 30 and over 65 fell by £88 from June 2012 to June 2013 alone.

And the average best premium on a home insurance policy across all ages has fallen from £125 in June 2011, to £118 in June 2012 and £116 in June 2013 - that's a fall of just over 7%.

Seeing as the best deals are usually reserved for new customers or those who challenge automatic renewal quotes, it really does pay to shop around.

It seems that Moneywise readers have learnt the importance of doing so, with 75% of car insurance customers and 53% of home insurance customers telling us they had switched providers in the past year, according to those who responded to the 2013 Consumer Opinion Survey.

Meanwhile, figures from Energy Helpline reveal that switching to the most competitive fixed-price dual fuel energy deal – the npower Online Price Fix February 2015 – could save an energy user who hasn't previously switched provider a whopping £240 on their annual bill.

It needn't be painful

It's understandable that some people put off switching because they think it will result in a personal admin nightmare – especially if they're considering moving their current account.

But the sluggish economy means financial companies are going to great lengths to make the process as hassle-free as possible.

For example, when switching a current account, although you will have to advise anyone that pays you money (such as your salary or pension) of your new account details, your new bank will move standing orders and direct debits for you. Some providers, such as Smile, send regular updates by text message to give you peace of mind that your new and old account are in safe hands.

All in all, shifting your current account to a new provider shouldn't take longer than four weeks. However, it's best not to close your old account until you are confident that all credits and debits are taking place as they should.

And switching to a new insurer shouldn't be too troublesome, either. You just need to cancel any direct debits to your old insurer.

So if your current providers aren't offering you a good enough deal to deserve your custom, cut the cord and switch to a new company. What are you waiting for?

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