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Mortgages remain the hardest product to switch

21 June 2016

Home insurance, car insurance and ISA or savings accounts are the easiest financial products to switch - mortgages, phones and broadband the most difficult

According to a new survey1 published today, mortgages remain the hardest financial product to switch. 

Commissioned by Gocompare.com, the survey questioned people who had shopped around for financial services in the last 12 months about their experience.  It revealed that home insurance (84%), car insurance (82%) and ISA or savings accounts (78%) were the easiest products to switch.  Mortgages came bottom of the list with only 61% of those surveyed saying they found switching their mortgage easy.      

Rank in 2016

Product switched

‘Was it easy to switch?’

May 2016

March 2015

July 2014

1

Home insurance

84%

90%

90%

2

Car insurance

82%

88%

84%

3

ISA or savings account

78%

78%

79%

4

Energy provider

76%

75%

75%

5

Credit card

76%

82%

83%

6

Bank account (current account)

73%

75%

77%

7

Broadband provider

69%

72%

68%

8

Mobile phone provider

68%

70%

72%

9

Land line telephone

68%

78%

80%

10

Mortgage

61%

59%

70%



When asked what factors had made a particular switch easy, 60% said it was because the process had been very straight forward; 53% that the switch was fairly quick; 42% said they didn't have to do too much work to make the switch.  Other factors included good service from the new provider (38%) and good communication from the companies involved (31%). 

When asked what had made switching products difficult, 28% said they had to answer too many questions or provide too much information.  A quarter said the process of changing providers or products was too complicated, while 32% said the switching process took too long.    

The survey also looked at factors which would encourage consumers to switch financial products more regularly.  Half of those surveyed said if it was easier to find out exactly how much they could save they would switch more, while 35% would be motivated to switch regularly if it was easier to find the right product for them.  Shorter timescales were also cited as an important factor, with 29% of those surveyed saying they would switch financial products more regularly if the process was faster from start to finish.    

Commenting on the research findings Matt Sanders, head of money at Gocompare.com, said: "Comparing prices and switching is an easy way to save money on insurances, household utilities and other financial products.  Although it can take a bit of work to get all the necessary paperwork and information together, it's worth the effort.  Customers in the habit of regularly reviewing their financial arrangements can significantly reduce their outgoings. 

"For example, by switching three of the most common products - car insurance, home insurance and energy supplier - consumers could save hundreds of pounds.  Just over half of customers using Gocompare.com could save up to £247 by switching their car insurance2, up to £62 on their home contents and buildings insurance3, and £207 by switching their gas and electricity supplier4.    

"For the second year running, consumers have told us that mortgages are the hardest financial product to switch.  This in part can be explained by the tougher lending rules which came into effect in April 2014.  These require lenders to assess the affordability of a mortgage by looking at would-be borrowers' overall financial health as well as their earnings.  Undoubtedly, the new application process has added to the complexities of remortgaging and increased the amount of information prospective borrowers need to provide.

Gocompare.com's top tips to help people get the best deal on their financial products and household bills:

1. Plan ahead: Give yourself time to review your arrangements and to check that you're still getting a good deal.  Add key dates to your diary, including renewal dates, the expiry dates of fixed rate deals or tariffs, the end of introductory offers, etc.; 

2. Don't accept renewal quotes or energy tariff changes without first checking that the new price you are being offered is competitive;

3. As well as comparing prices and headline rates, check the small print of the deal on offer.  Make sure you understand all the charges, any penalties, exclusions and terms and conditions you will be required to meet; 

4. Use a comparison website - they provide quick and up-to-date information on a wide range of financial products and services.   

-ENDS-

Notes to editors:

  1. On 09 May 2016, Bilendi conducted an online survey among 2,001 randomly selected British adults who are Maximiles UK panelists.  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.  1,136 of respondents had switched a financial product in the last 12 months.
  2. Based on online independent research by Consumer Intelligence during 01 April 2016 to 30 April 2016, 51% of customers could save based on a comparison of at least 35 companies up to £246.75* by switching their car insurance.
  3. Based on online independent research by Consumer Intelligence during 01 April 2016 to 30 April 2016, 51% of consumers could save based on a comparison of at least 35 up to £61.90 on their home contents and buildings insurance.
  4. Energy (dual fuel); 51% of customers saved £207 switching energy with Gocompare.com (based on prices for switching with Gocompare.com, 01 October - 31 December 2015).