Apathetic savers missing out on the best rates
Consumers aren’t receiving the best deals and rates for their cash savings because they stay with the same account, according to the Current Account Switch Service.
The switching service commissioned a white paper on the savings market in order to understand consumers’ needs. It found that many consumers are reluctant to swap to different products, with only about one in eight (13 per cent) of savings accounts switched to a new provider or product in the past three years.
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.
The study found that 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 reason people gave for not switching was inertia, with consumers aware of better products, but not feeling an impetus to look at their options, select the most appropriate, and initiate the switch.
According to figures from the Financial Conduct Authority, easy access savings had a total balance of £354bn in 2015, with 33 per cent of the cash held in accounts opened more than five years ago.
Matthew Hunt, chief operating officer of Pay.UK, which owns the Current Account Switch Service, said: “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.”
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