Consumers are not receiving the best deals and rates for their savings by staying with the same account, according to research1 from the Current Account Switch Service, in its white paper on the savings account market.
The white paper, commissioned to understand consumer needs, reveals that 13 per cent of all savings accounts were switched in the last three years, as many consumers are reluctant to swap to different products.
The research found the introduction of a savings switch service, based on a similar model to the Current Account Switch Service, could benefit both financially savvy consumers and those with simpler requirements. It shows 56 per cent of under 45s who have a savings account said a switch service was very appealing, rising up to 60 per cent among regular savers and those with multiple saving products.
The most common barrier people experience as they consider switching is inertia, with consumers aware of providers who offer products that better suited their needs, but they don’t feel an impetus to look at their options, select the most appropriate, and initiate the switch.
Easy-access savings accounts in the UK had a total balance of £354 billion in 2015, with 33 per cent of it held in accounts opened more than five years ago, according to the latest FCA market study.2
The Current Account Switch Service aim is to enable a well-functioning market and ensure people can find and switch to the financial products that meet their needs. Further discussion is needed in this complex area of financial services and the Switch Service welcomes further engagement with stakeholders about switching in the savings account market.
I’m pleased that CASS continues to provide evidence that helps us all to understand how to make financial services work better for consumers. Our research suggests that a savings account switch service might contribute to making the market more efficient and it could help customers who wanted to switch their savings to an account that better matched their needs.
Said, Matthew Hunt, COO of Pay.UK, owner and operator of the Current Account Switch Service.
The white paper, published today, is available to read below.
The Current Account Switch Service can be contacted by email here.
1. PwC Research included stakeholder interviews and a nationally representative 2,000 respondent quantitative study, further enhanced by the qualitative aspect with twelve focus groups and six in-depth interviews.
2. Cash Savings Market Study. FCA. 2015.