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Loyal consumers lose £billions by sticking with insurers, banks and energy providers

10 January 2014

Over seven million consumers have NEVER switched ANY of the ten most popular financial products and services

Over 7 million1 loyal UK consumers who have NEVER switched ANY of the top 10 most popular financial products could be missing out on billions of pounds worth of savings by not switching.

New research commissioned by Gocompare.com has found that 15% of adults have never switched providers for ten of the most popular financial products and could be missing out on a saving of £242.55 on their car insurance2, £159.43 on their home insurance3, and £309.05 on their energy costs4 as well as losing out on uncompetitive savings accounts, bank accounts, mobile phone tariffs, mortgages and credit cards to name but a few.

  • 31% of UK consumers have not switched car insurer in the last three years – potential collective saving of £1.9bn5
  • 38% have not switched home insurer in the last three years – potential collective saving of £1.5bn6
  • 54% have not switched energy provider in the last three years – potential collective saving £4.3bn7
  • 15% have NEVER switched their car insurance, home insurance, energy, mobile phone, broadband, landline, mortgage, credit card, current account and ISA or savings account providers

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. However, despite recent moves to make bank switching more straightforward, current accounts remain the least switched financial product, with 38% of people admitting they’ve had the same current account all of their lives.

Next on the loyalty list are communications providers with broadband, mobile and landline services.

Long term loyalty list

  • 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
  • 13% have switched all of the above at least once
  • 15% have NEVER switched any of them

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.

“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.

“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.”

-ends-

Notes to editors:

On 16-17 December 2013, Vision Critical conducted an online survey among 2,005 randomly selected British adults who are Springboard UK panellists.  The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.

1 - 7 million figure is based on 15% of the UK adult population who have not switched any of the 10 most popular financial products as listed (the UK Adult population (+18) is estimated to be 47,755,246, according to Experian’s Demographic Summary). Therefore 15% of 47.7 million is 7.16 million (or 7m rounded to the nearest million).

2 – Based on independent research by Consumer Intelligence during 1 October, 2013 to 31 October, 2013: 51% of consumers could achieve a saving of up to £242.55 with Gocompare.com car insurance.

3 - Based on Gocompare.com data: 25% of customers who provided their building and contents insurance renewal price saved up to £159.43 with Gocompare.com (1st July - 30th September 2013).

4 - Based on customers who switched energy supplier for both gas and electricity (dual fuel) using the Energylinx powered Gocompare.com platforms during the 1st July - 30th September 2013: At least 10% of people who switched energy supplier for both gas & electricity with Gocompare.com saved £309.05 or more.

5 – According to the DVLA at the end of 2012 there were 28.7m cars licensed for use on UK roads. £1.9 billion is based on the 31% of consumers who have not switched car insurer in the last three years x 28.7m cars x average saving of £243.00 = £1,902,534,480 (rounded to £1.9bn)

6 – According to the ONS there were 26.4m households in the UK in 2012.  £1.5 billion is based on the 38% (10m) households which have not switched home insurer in the last three years. Average saving of £159.00 X £10m = £1,590,000,000 (rounded to £1.5bn)

7 – According to the ONS there were 26.4m households in the UK in 2012.  £4.3 billion is based on the 54% (14.2m) households which have not switched energy supplier in the last three years. Potential saving of £309.00 X 14.2m = £4,387,800,000 (rounded to £4.3bn)