Credit crunch cuts switching by 17% in a year
The credit crunch has hit home with a 17% drop in the number of household and financial products being switched in the past year, according to MoneyExpert.
In the first quarter of 2008, a total of 32.2 million household bills for a range of basic services were moved to other providers compared with 38.9 million in the first quarter of 2007.
The independent financial comparison website is blaming the slide on a combination of reduced mortgage transactions, increasing interest rates on credit products and tougher lending conditions being imposed by financial providers. However the proportion of car and household insurance customers switching and the percentage of savers searching out new deals has not changed year-on-year.
Around 14% of motor insurance customers and 10% of home insurance customers have switched providers in the past six months while 5% of savers have moved to more attractive accounts. Around 54% of adults have not switched any product in the past six months compared with 49% in the same period last year.
Sean Gardner, founder of MoneyExpert, said: “Switching in search of a more competitive deal remains big business with 46% of us moving at least one product to another provider.
“However the credit crunch is having an effect on people’s ability to move as lenders increase rates and prices and withdraw products. Doing nothing shouldn’t be an option. There are still good deals out there and if finances are stretched savings should be sought if at all possible.”