Brits miss out on annual savings of £1,524 by never switching financial products
- 16 million have never switched savings providers, missing out collectively on £6.77bn a year
- A quarter of Brits (24%) who don’t switch savings providers, stay put because they “can’t be bothered to move”
- Two fifths of UK adults (41%) stated they have never switched current account provider
- Those switching credit, savings and investment account providers alone could be saving £1,278 a year
- Wealthify launches Instant Access Savings Account
New research published today by Wealthify has found that Brits are creatures of habit and as a result have stayed put when it comes to financial products, and they could be losing on up to £1,524 a year. Furthermore, 16 million Brits have never switched their savings account provider, a move which has cost them collectively up to £6.77bn per year (£426 per person annual saving)!
All Change
Brits are no strangers to shopping around for the best deals, with 39% of UK adults searching for the best deals on beauty treatments and 34% doing the same for subscriptions.
However, they showed more reticence when it came to changing financial providers, even with the prospect of securing a better deal. Two fifths of UK adults (41%) stated they have never switched current account provider, with three in ten UK adults (30%) also sticking with the same savings account.
Switching Pays
Based on those who switched in the last two years, the biggest savings were made on financial products. Those switching credit card provider, savings account and investment account providers saved an average of £35.50 a month, or £426 per year, and those that fail to switch miss out on combined savings of £1,278 a year.
| Median average savings per month when switching providers | Median average savings per year when switching providers | ||
| Investment account to a different provider | £35.50 | £426.00 | |
| Beauty treatments e.g. facial, massage | £35.50 | £426.00 | |
| Medical e.g dental | £35.50 | £426.00 | |
| Savings account to a different bank | £35.50 | £426.00 | |
| Credit card provider | £35.50 | £426.00 | |
| Current account provider | £20.50 | £246.00 | |
| Utility provider (e.g. gas, electric, energy provider) | £25.50 | £306.00 | |
| Hairdresser / barber / nail technician | £25.50 | £306.00 | |
| Main grocery shopping to a different supermarket to normal | £25.50 | £306.00 | |
| Subscriptions e.g. Netflix or Gym | £15.50 | £186.00 | |
| Smartphone to a different operating system (e.g. Apple iOS to Android) | £25.50 | £306.00 | |
| Totals | £315.50 | £3,786.00 | |
Less than half (38%) had switched savings account providers in the past two years, a stark figure when considering how interest rates on cash savings accounts have been steadily rising for the past 18 months and extra interest earned by those who switched providers.
Surprisingly, given the readily available nature of free expert advice at our fingertips, only 8% of people switched due to recommendations from experts.
Andy Russell, CEO, Wealthify said: “With a mountain of tasks on our everyday to-do lists, it’s understandable that people don’t get round to switching to better rates on their financial products. However, with interest rates currently at a high, static savings could be missing out on substantial returns. The potential £426 saving could be the difference between taking a summer holiday or that last push towards another savings goal.
“Banks and other providers tend to rely on the customer loyalty seen here, with as many as three in ten (30%) adults sticking with the same savings account provider they’ve always been with. But it’s clear shopping around could be beneficial. In the FCA’s latest savings market review, the average rate paid on Instant and Easy Access savings accounts was 1.99% — materially below the Bank of England’s (BoE) base rate1. It also found that, on average, customers were missing out on three weeks of increased rates when the base rate changed2. Some accounts also move to lower interest rates after a bonus rate period finishes, with customers often too busy to continually shop around.”
COMO – Conscious of Missing Out
One in four (23%) of those that stay put instead of switching simply cannot be bothered to switch their investment account provider, with a similar proportion (24%) not being bothered to switch their savings account or current account provider.
People who felt worse off financially for staying put were acutely aware of it, with a third (34%) saying it makes them feel frustrated, ripped off (29%) and stuck/trapped (22%).
For those who do shop around for deals on things like subscriptions or beauty treatments but not for their savings/investments, one in four (25%) stated that this was due to trusting they have chosen the right product, whilst 22% mention they’ve been with their bank for a long time and trust it’ll give them a good rate.
Ease reigned supreme as one in five (20%) stated that it is more hassle to switch savings and investments, with a further 14% who feel savings and investment rewards are all the same.
Andy Russell continues: “We understand that it might feel like less effort to drive to a different supermarket or perhaps pick a different hairdresser to save money, but people should not overlook how much more they could potentially save each year just switching savings provider.
“Some providers, including ourselves, are tackling this problem head on, launching a simple, straightforward Instant Access Savings Account which offers savers a rewarding rate that tracks the BoE base rate minus a margin, ensuring customers get the best available returns on their savings. Designed with ease in mind, our account allows you to access your money instantly, whenever you want and without fear of being penalised for withdrawals.”
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