BLOG: It has never been more important for savers to shop around
The introduction of the ‘New ISAs’ at the beginning of this month should have been a good news story for savers across the UK. However, despite the fact that savers now have the opportunity to save more money tax free than ever before, people are failing to review their products and could be missing out on opportunities to make the most of their savings.
With cash returns predicted to remain at similar levels over the next few years it has never been more important for savers to shop around and make sure that they have the most appropriate product and best rate for their needs, as offers from one provider to the next can vary significantly. In spite of this, Bank of Cyprus UK research tells us that half of savers have never switched their savings provider.
It is puzzling that so many consumers take a back seat when it comes to finding the best home for their money. In fact, over a third have been with the same bank or building society for 11 years or more, which is the average length of marriage in the UK. Furthermore, one in five savers admit to never reviewing the rate they get on their savings.
The Bank of Cyprus found that loyal savers feel let down by their bank or building society, with 50% believing providers treat new customers better than existing ones. A recent Financial Conduct Authority investigation found this to be the case, with some banks giving their most loyal savers lower rates.
It is clear that in a time-poor world savers want to be assured that they won’t not be misled, forgotten about or have their loyalty exploited. While the inertia reported by savers may be partly to do with interest rates continuing at an all-time low, it makes sense for savers to take control, look around, and not just rely on their current provider to ‘do the right thing’.
The launch of the new ISA allowance will hopefully act as a trigger for people to review their arrangements to ensure they are getting a good rate and are making the most of this improved tax free savings opportunity.
Tony Leahy is head of human resources and communications at the Bank of Cyprus UK.