The new current account switching service will launch on September 16th and the majority of consumers are aware they can change their household servic…
The new current account switching service will launch on September 16th and the majority of consumers are aware they can change their household service providers but 42 per cent make little or no effort to do it.
This comes from a report from the independent price comparison uSwitch.com, which explored the attitudes towards moving essential household services, including bank accounts, mortgages, insurers and utilities.
It found awareness does not lead to action, with many held back by fear factors, barriers and their own misconceptions. Some 95 per cent of energy customers are aware they can make a change, but less than four in ten (38 per cent) have ever done so.
Similarly, 94 per cent know they can switch their bank or current account, but again, less than half (47 per cent) have ever made the move. Strangely, this is not because people are happy with their provider, in fact across all household services, less than three in ten (28 per cent) are put off because they are content with their current supplier.
Individuals appear to have strong perceptions about how easy or difficult it is to move different household services and this impacts the likeliness of them making the change. Mortgages, digital TV and bank accounts are considered to be the most difficult and all three rank as the least likely to be switched.
However, the report found consumers overestimate how difficult it is to switch. Some 62 per cent of mortgage customers assume moving is difficult, while three-quarters (77 per cent) of those who have made the move found it easy.
It is the same with bank accounts, with more than four in ten (45 per cent) perceive switching bank account to be difficult, but in reality 83 per cent found it easy.
People also consider the potential impact it could have on their lives should things go wrong and bank accounts and mortgages were the most cited in this field. These customers need more of a push to switch than others.
Over four in ten (41 per cent) require a chronic or very bad experience with their bank account provider to make them move to another institution, while 36 per cent said the same thing about mortgages.
However, once individuals do switch it all becomes about money, with 66 per cent doing so to save cash, while 34 per cent are looking for a better service.
On average consumers will change to save £100 a year. However, this rises to £177 a year for mortgages and £111 a year for energy suppliers, which could be a fantastic amount for those lumbered with debt.
Ann Robinson, director of consumer policy at uSwitch.com, said: "Switching is a key weapon in every household's battle to keep bills under control. Unfortunately, what should be a simple solution has been placed ‘off-limits' with many consumers unwilling or unable to get past the barriers they perceive to be in the way.
"It's evident that a lot still needs to be done to help consumers feel confident to shop around for a better deal. At the moment they are being held back by a lack of education, support and encouragement."
Changing service suppliers is a good way of reducing money and people should keep a close eye on their bills to see if they can get a better deal elsewhere. With household budgets becoming strained, switching could make a real difference to family finances.
By James Francis